GBP/USD and USD/CAD Outlook: Markets Test Critical Price Zones

Market sentiment has stabilised following a brief period of USD weakness tied to geopolitical uncertainty. President Trump’s more constructive remarks on the US economy and the removal of near-term tariff threats have helped restore confidence, allowing the US dollar to find firmer footing. As a result, GBP/USD and USD/CAD have both rebounded from key technical zones, with price now approaching areas that will determine whether broader trends reassert or consolidation extends.

Upcoming flash PMI data for manufacturing and services on Friday is the next near-term catalyst, with the potential to inject volatility into both pairs.

Macro and Sentiment Backdrop

Sentiment has shifted back toward neutral after briefly turning bearish on the dollar and risk assets. Trump’s comments highlighting strong US growth, tax reductions, rising equity markets, and resilient consumer wealth have helped stabilise USD price action.

This shift has capped recent gains across major pairs, with EUR/USD pulling back from highs, USD/CAD rebounding from support near 1.3780, and the DXY consolidating around the 98 zone. While gold remains elevated near record levels, broader momentum has paused, reinforcing a more balanced near-term environment.

GBP/USD Outlook

Weekly Structure Under Pressure

GBP/USD remains locked in an extended consolidation that has defined price action since 2023. The pair recently pulled back from long-term resistance connecting higher highs from mid-2023 through late 2024, just above the 1.30 region.

The rebound from the 1.30 zone is forming a potential bullish flag on the weekly chart. RSI holding above the 50 level supports a constructive bias, but confirmation is still required.

A sustained hold above 1.3570 would validate the continuation pattern and open the door toward the 1.38 region, a key multi-year resistance area. A successful break above that level would shift the longer-term structure bullish, exposing upside toward the 2021 highs near 1.42.

On the downside, 1.33 remains critical support. A decisive break below would invalidate the bullish setup and refocus attention on the 1.30 to 1.2940 zone. A sustained move below 1.2940 would increase downside risk toward 1.2740 and potentially 1.2480.

GBP/USD Weekly Chart

USD/CAD Outlook

Rebound Faces Confirmation Test

USD/CAD continues to reflect a broader topping structure that began forming in late 2025. Following renewed US–EU tariff tensions, a smaller double-top pattern developed, with price reaching its measured objective near 1.3780 before rebounding as diplomatic risks eased.

While the bounce has stabilised price action, conviction remains limited. The recovery needs a clear hold above 1.3880 to suggest that downside pressure has fully eased. The daily RSI slipping back below the 50 level reinforces the need for confirmation.

Failure to hold above current levels leaves the pair vulnerable. A close back below 1.3780 would expose the December 2025 low near 1.3670, with deeper downside risk toward the June 2025 low at 1.3540 if bearish momentum accelerates.

USD/CAD Daily Chart

Bottom Line

Both GBP/USD and USD/CAD are trading at technically meaningful zones as macro sentiment stabilises and geopolitical tensions cool. GBP/USD remains constructive but requires confirmation to transition into a broader bullish phase. USD/CAD has rebounded from key support, yet the recovery remains fragile without follow-through.

With PMI data ahead and sentiment finely balanced, price action around these inflection points will be critical in determining whether consolidation persists or trends re-emerge.