GBP/USD Eyes 1.35 Next But ING Warns Recovery May be Brief - Pound Sterling Live
At a Glance
The desk is cautiously optimistic about GBP/USD's potential ascent towards 1.35, pending a determined drive from market dynamics. Per the full note, ING's forecast suggests this level is attainable soon, but they warn that the recovery could be fleeting. Current consensus among banks indicates a median target of 1.3450 by March 2026 with a range from 1.3200 to 1.3800. With no significant economic events ahead to act as market catalysts in the coming weeks, this upward motion may heavily depend on shifts in sentiment and positioning among institutional traders.
Key Takeaways
Full Analysis
What the desk is arguing
The desk frames GBP/USD’s approach to the 1.35 mark as a possibility that may soon be realized, though there is a caveat regarding the sustainability of this recovery. Per the full note from ING, while the pair is steering towards 1.35, a broader assessment indicates that any uptick may not be long-lasting due to prevailing economic uncertainties.
Recent positioning suggests that traders are betting on a rebound in GBP/USD, as reflected in our analysis showing numerous forecasts aligning around the 1.35 mark. Specifically, a slew of banks, including Goldman and JPMorgan, have projected similar targets, reinforcing this upward sentiment on GBP/USD.
Where it sits in our coverage
Our internal consensus target for GBP/USD stands at 1.3450, with a range of 1.3200 to 1.3800 by March 2026. Notably, several firms have aligned forecasts that bolster this outlook: - JPMorgan: Mar26 1.3700 - Goldman: Mar26 1.3300 - MUFJ: Mar26 1.3500
This perspective largely falls in the middle of the cross-firm consensus, with ING’s adjusted target of 1.3500 for March 2026 aligning with broader predictions. The desk views this as a justified position, resting at a practical median within a consensus that indicates ongoing deliberation among banks without extreme deviations.
How other firms see it
Aligned firms such as Deutsche Bank, Barclays, and HSBC share similar bullish forecasts for GBP/USD. On the contrary, more conservative stances come from Citi, which exhibits a more bearish target forecast, suggesting a potential divergence in outlooks as GBP/USD approaches key resistance levels.
The ongoing trajectory of EUR/USD may offer additional insights as both pairs often react to similar economic indicators and central bank signals, particularly in the context of the BoE's potential policy adjustments.
Market Implications
Traders should monitor GBP/USD levels approaching 1.35, as this threshold will likely dictate near-term sentiment. The absence of fresh economic data might lead to position-driven price movements emanating from the current consensus.
GBP/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
ING | Neutral | 1.3500 |
UOB | Bullish | 1.3700 |
Rabobank | Bearish | 1.3300 |
From the original
GBP/USD Eyes 1.35 Next But ING Warns Recovery May be Brief Pound Sterling Live
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4 itemsGBP/USD Forecast Update from Morgan Stanley: "Upside Surprise" - Pound Sterling Live
The desk sees a bullish outlook for GBP/USD, pointing to an upside surprise in Morgan Stanley's latest forecast which projects a Mar-26 target of 1.3800 and a Dec-26 target of 1.4700. This contrasts with the current consensus of 1.3450 for Mar-26, demonstrating a significant divergence in expectations. Per the full note [source], the latest revisions suggest that a strong recovery in the UK economy could support further gains for the pound. Central bank actions, particularly from the Bank of England, will be critical in shaping the trajectory of GBP/USD, particularly in the context of rising rates versus a dovish Fed stance.
Sterling’s rally is not built to last
The desk interprets the recent rally in sterling as unsustainable, driven more by positioning and speculative flows than by substantial improvements in UK fundamentals. Per the full note from ING, with expectations of lower short-dated rates and renewed fiscal risks, the desk anticipates a reversal of these gains as we approach year-end. Current consensus targets for GBP remain relatively clustered around 1.35, indicating that most market participants align with the view that any further upward momentum is limited. The lack of high-impact upcoming events further diminishes the likelihood of sterling sustaining its gains in the near term.