CFD Trading Rate Great Britain Pound vs US Dollar (GBPUSD)

• GBP/USD kicks off the new week on a weaker note amid the emergence of some USD buying.
• Trump's tariff threats, geopolitical risks and bets for a less aggressive Fed easing boost the USD.
• Diminishing odds for a December BoE rate cut could offer support to the GBP and the major.

The GBP/USD pair attracts some sellers on the first day of a new week and reverses a major part of Friday's positive move to mid-1.2700s, or a nearly three-week high. The intraday slide drags spot prices back below the 1.2700 mark in the last hour and is sponsored by a goodish pickup in the US Dollar (USD) demand. 

Against the backdrop of persistent geopolitical risks, worries about the second wave of trade war after US President-elect Donald Trump takes office in January drive some haven flows towards the Greenback and exert some pressure on the GBP/USD pair. In fact, Trump threatened a 100% tariff on the so-called 'BRICS' nations – Brazil, Russia, India, China, and South Africa – if they replace the USD with another currency for international transactions. 

Trump has also promised big tariffs against America’s three biggest trading partners – Mexico, Canada and China. This could push consumer prices higher and set the stage for the Federal Reserve (Fed) to stop cutting interest rates or possibly raise them again. Apart from this, the cautious market mood turns out to be another factor that assists the safe-haven buck in recovering a part of last week's heavy losses to its lowest level since November 12. 

The downside for the GBP/USD pair, however, seems limited on the back of reduced bets for another interest rate cut by the Bank of England (BoE) this year. Data released recently showed that the underlying price growth in the UK gathered speed and accelerated sharply to the 2.3% YoY rate in October. This suggests that the BoE will move cautiously, which could underpin the British Pound (GBP) and lend some support to the currency pair. 

Traders might also refrain from placing aggressive directional bets ahead of this week's important US macro data scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later this Monday. The market focus, however, will be on the critical US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday. This might provide cues about the Fed's rate cut path and influence the USD price dynamics.

• GBP/USD sees over 1.2% weekly gain but faces resistance near 1.2700, risking pullback to 1.2600.
• Oscillators like RSI suggest growing buyer momentum yet remain below the neutral threshold.
• Break above 1.2700 could target 200-day SMA at 1.2818, with this week’s high at 1.2749 as immediate hurdle.

The Pound Sterling clings to earlier gains yet trades off the weekly highs, which reached around 1.2749 during the European session. At the time of writing, the GBP/USD trades at 1.2684, virtually unchanged.

GBP/USD Price Forecast: Technical outlook

Although the GBP/USD is set for weekly gains of over 1.2%, price action suggests Cable didn’t find acceptance above 1.2700, which could exacerbate a pullback toward the 1.2600 figure. In that outcome, the pair’s next support would be the November 27 daily low of 1.2564, followed by the November 26 low of 1.2506. On further weakness, the November 22 pivot low of 1.2486 is on the cards.

Conversely, if GBP/USD finishes the week above 1.2700, this could pave the way for testing the 200-day Simple Moving Average (SMA) at 1.2818. However, buyers must clear the current week’s peak of 1.2749.

Oscillators such as the Relative Strength Index (RSI) hint that buyers are gathering momentum, even though the RSI remains below its neutral line.

Therefore, in the short-term, the GBP/USD upside is seen if it clears at 1.2700.

GBP/USD Price Chart – Daily

• GBP/USD prolongs its multi-day-old uptrend and climbs to a two-week high on Friday.
• Reduced bets for a December BoE rate cut lend support to the pair amid a softer USD.
• Geopolitical risks and trade war fears could limit the USD fall and cap gains for the pair. 

The GBP/USD pair gains some follow-through positive traction during the Asian session on Friday and touches a two-week top, around the 1.2715 region in the last hour. Spot prices have now rallied over 200 pips from the weekly trough and look to build on the recent recovery from sub-1.2500 levels, or the lowest since May 2024 touched last Friday amid subdued US Dollar (USD) demand.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, struggles to capitalize on the overnight modest gains and languishes near a two-week low amid bets for another interest rate cut by the Federal Reserve (Fed) in December. In fact, the current market pricing indicates a 70% chance that the US Central Bank will lower borrowing costs by 25 basis points next month. This, along with the recent decline in the US Treasury bond yields, keeps the USD bulls on the defensive and turns out to be a key factor acting as a tailwind for the GBP/USD pair. 

Meanwhile, traders have been scaling back their bets for another interest rate cut by the Bank of England (BoE) this year after data released last week showed that the underlying price growth in the UK gathered speed in October. This further contributes to the British Pound's (GBP) relative outperformance against its American counterpart and validates the positive outlook for the GBP/USD pair. However, a combination of factors might hold back traders from placing aggressive bearish bets around the USD and cap any meaningful appreciating move for the currency pair. 

The US PCE data released on Wednesday showed that the progress in lowering inflation in the US stalled in October. Moreover, investors now seem convinced that US President-elect Donald Trump's expansionary policies will boost inflation. This comes on top of hawkish FOMC meeting minutes earlier this week, which revealed that the Committee could pause its easing of the policy rate if inflation remained elevated. Apart from this, geopolitical risks and trade war fears could benefit the Greenback's relative safe-haven status and cap the upside for the GBP/USD pair.

• GBP/USD is treading water near 1.2700 with a quiet Friday on the docket.
• Data is thin on both sides of the Atlantic to wrap up the trading week.
• BoE”s FSR is unlikely to move the needle on Friday, markets await next week’s NFP.

GBP/USD saw a quiet Thursday session, trading on the thin side and holding on near the 1.2700 handle. US markets were dark on Thursday for the Thanksgiving holiday, and Friday will also see shortened US trading hours, keeping the back half of the trading week on the low end of volumes overall.

The Bank of England’s (BoE) latest Financial Stability Report will drop on markets early during Friday’s upcoming US market session. The release is overwhelmingly unlikely to drive much momentum in Cable markets. However, traders should still be on the lookout for low-volume volatility spikes. With the US slated to have shortened trading hours on Friday, overall market liquidity will be even lower than usual, making it easier for outsized orders to shock bids.

Next week’s economic data docket bodes just as poorly for the Pound Sterling. Very little data of note is slated for release next week on the UK side, while traders will be hunkering down to wait for next Friday’s US Nonfarm Payrolls (NFP) jobs report, scheduled for December 6. Next week’s NFP will take on renewed importance for traders now that watching for signs of rate cuts from the Federal Reserve (Fed) has taken a backseat as of late. However, a large move in either direction in NFP figures could jolt Treasury rates, sparking fresh fears of either too many or too few rate cuts heading into 2025.

GBP/USD price forecast

The GBP/USD trend is downward biased, though the British Pound has made some recovery. For buyers to regain control, they need to break above 1.2714, the November 20 high, and the 200-day Simple Moving Average (SMA) at 1.2818. If these levels are surpassed, moving towards 1.3000 will be challenging due to a recent 'death cross' formation between the 50-day and 100-day SMAs.

Sellers must close below 1.2600 for a bearish continuation, which would expose the November 26 low at 1.2506, followed by last week's low of 1.2486. Overall, while the GBP/USD has a slight short-term upside, significant downside risks persist.

GBP/USD daily chart

• GBP/USD maintains a downward trend but shows signs of short-term upward bias.
• Resistance levels to watch include 1.2714 and the 200-day SMA at 1.2818.
• Key supports lie at 1.2600 and further down at the November 26 low of 1.2506.
• Oscillators like the Relative Strength Index (RSI) hint at continued bearish sentiment despite a recent uptick

The GBP/USD consolidates at around weekly highs, posting modest losses of 0.05% at around 1.2670 due to thin liquidity conditions as US markets remain closed for Thanksgiving.

The Greenback has been pressured for the last few days due to month-end flows and rebalancing, noted ING. Although US data was upbeat on Wednesday, market participants digested Trump’s tariff rhetoric.

GBPUSD Price Forecast: Technical outlook

The GBP/USD trend remains downward biased, although the Pound has recovered some ground. If buyers want to regain control, first, they need to clear 1.2714, the November 20 high, followed by the 200-day Simple Moving Average (SMA) at 1.2818, which has turned flat. If those two resistance levels are surpassed, buyers' ride toward 1.3000 would not be easy after the 50-day SMA just crossed below the 100-day SMA and accelerated toward forming a ‘death-cross.’

Conversely, sellers must achieve a daily close below 1.2600 for a bearish continuation. A breach of the latter will expose the November 26 low of 1.2506, ahead of last week's low of 1.2486.

Oscillators such as the Relative Strength Index (RSI) remain bearish-biased despite rising for three straight days. The GBP/USD is tilted to the upside in the short term, but downside risks remain.

GBP/USD Price Chart – Daily

Strong momentum suggests further Pound Sterling (GBP) strength; overbought conditions could limit any advance to a test of 1.2715. In the longer run, outlook has shifted from negative to positive; any advance is likely a recovery, potentially testing the resistance at 1.2755, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP can potentially test the resistance at 1.2755

24-HOUR VIEW: “Our view for GBP to trade in a range yesterday was incorrect. Instead of trading in a range, GBP surged, closing higher by 0.89% at 1.2679, its biggest 1-day gain since late Aug. Strong momentum suggests further GBP strength, even though deeply overbought conditions could limit any advance to a test of 1.2715. The major resistance at 1.2755 is likely to be out of reach for now. On the downside, any intraday pullback is expected to face strong support at 1.2620, with minor support at 1.2640.”

1-3 WEEKS VIEW: “We have held a negative view in GBP since the middle of this month. After GBP plummeted to 1.2475 and rebounded strongly, we indicated on Monday (25 Nov, spot at 1.2590) that ‘the sharp drop appears to be overextended.’ We pointed out, ‘any further decline may find it difficult to break last Friday’s low of 1.2475, which is serving as a significant support level.’ However, we did not quite expect GBP to jump quickly above our ‘strong resistance’ at 1.2650 (high has been 1.2694). Given the surge in upward momentum, the outlook seems to have shifted from negative to positive. That said, we view any advance from here as a recovery rather than the beginning of a major reversal. Overall, as long as 1.2575 is not breached, GBP could recover and test the resistance at 1.2755.”

• GBP/USD faces challenges due to increasing caution surrounding the Fed’s decision next month.
• US markets may witness thin trading activity due to the Thanksgiving holiday on Thursday.
• The Pound Sterling may gain ground as BoE officials support following a gradual policy-easing approach.

GBP/USD holds losses as the US Dollar (USD) advances as the latest US inflation report indicated solid growth in consumer spending for October, but it also highlighted a stagnation in progress toward lowering inflation, keeping the Fed on alert. The GBP/USD pair edges lower to near 1.2660 during the Asian trading hours on Thursday. US markets may witness thin trading activity due to the Thanksgiving holiday on Thursday, to be followed by shortened trading hours on Friday.

The US Personal Consumption Expenditures (PCE) Price Index increased by 2.3% year-over-year in October, up from 2.1% in September. Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, rose by 2.8%, slightly higher than the 2.7% recorded the previous month. Additionally, annualized US Gross Domestic Product (GDP) grew by the expected 2.8% through the third quarter.

Economic data remains limited for the United Kingdom (UK), with a similarly sparse calendar expected next week. As a result, the Pound Sterling (GBP) will largely be driven by market expectations surrounding the Bank of England's (BoE) interest rate decision in December.

Speaking at King’s Business School on Monday, BoE Deputy Governor Clare Lombardelli emphasized the need for more evidence of easing price pressures before supporting further rate cuts. Lombardelli also cautioned about the risk of inflation staying above the bank’s target, noting that wage growth stabilizing at 3.5%-4.0% and the Consumer Price Index (CPI) remaining around 3%—rather than the 2% target—could pose significant challenges.

• GBP/USD snapped back above the 1.2600 decisively on Wednesday.
• Cable is now bound for a fresh test of 1.2700, but data remains lean.
• A raft of widely-expected US data clears the way for US market holiday.

GBP/USD finally broke back above 1.2600 on Wednesday, propelled higher by a broad-market softening in the Greenback’s recent bullish stance. Economic data remains slim on the UK side of the calendar, and following Wednesday’s broad print of US figures that came in broadly as expected, markets are set for a quiet showing for the rest of the week.

Investors will see a notable constraint on market flows on Thursday and Friday: US markets will be entirely shuttered on Thursday for the US Thanksgiving holiday, and Friday will be light as well with most US exchanges cutting their operating hours short. The UK’s data docket remains equally-thin next week, where investors will be pivoting to face another round of US Nonfarm Payrolls figures next Friday, with plenty of preview employment data to muck up the view.

Annualized US Gross Domestic Product (GDP) grew by the expected 2.8% through the third quarter, to no one's surprise and barely moving the needle on investor pulses. Core Personal Consumption Expenditure Price Index (PCEPI) accelerated to 2.8% for the year ended in October, also meeting expectations. While upticks in inflation metrics generally bode poorly for market expectations of future rate cuts, the move upward was widely expected, and a hold in monthly figures at 0.3% MoM helped to frame the bump in the data as being in the rear-view mirror.

GBP/USD price forecast

Wednesday’s Cable rebound has the pair taking a fresh run at the 1.2700 handle, adding nearly a full percent through the day’s trading and priming GBP/USD bulls for a new leg back into the high side following a 7% top-to-bottom decline from September’s peaks at 1.3434. However, long positioning is set to run into new challenges at the 200-day Exponential Moving Average (EMA) near 1.2835.

GBP/USD daily chart

• GBP/USD rallies to a four-day high of 1.2667, trading at 1.2646 at the time of writing, up 0.64% daily.
• Bulls need to reclaim 1.2700 to target the 200-day SMA at 1.2818, while a break above could shift the bias upward.
• On the downside, a move below 1.2600 could see the pair test the November 22 low of 1.2486, with further support at the year-to-date low of 1.2299.

The Pound Sterling rallied to a four-day peak against the US Dollar at 1.2667 as market participants shrugged off Trump’s tariffs threats, which sparked a flight to safety on Tuesday. At the time of writing, the GBP/USD trades at 1.2646, above its opening price by 0.64%.

GBP/USD Price Forecast: Technical outlook

The GBP/USD remains biased downward despite recovering the psychological figure of 1.2600. Bulls must reclaim 1.2700 to test the 200-day Simple Moving Average (SMA) at 1.2818. If those levels are cleared, the bias could shift upwards.

For a bearish continuation, if GBP/USD drops below 1.2600, bears could drive the exchange rate toward the November 22 swing low of 1.2486. A breach of the latter will expose the year-to-date (YTD) low of 1.2299.

Oscillators such as the Relative Strength Index (RSI) signals buyers’ recovery. However, bears remain in charge as the RSI remains below the neutral line.

GBP/USD Price Chart – Daily

The Pound Sterling (GBP) is modestly higher on the session, tracking its G10 peers for the most part. BoE DG Lombardelli reiterated her caution on the policy outlook in an interview with the FT, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP gains modestly

“The latest comments go a little further in defining the ‘cautious’ approach to policy adjustment that her colleagues have referenced in recent comments. Lombardelli wants to see more evidence of the ‘disinflation process continuing’ before easing again. Markets continue to price in around 80% risk of a 25bps cut in February, with the Bank widely expected to take a pass at the December decision.”

“Cable has been pressuring minor trend resistance off the early November high in spot over the past couple of sessions and has managed to make a clean break above that point (now intraday support) at 1.2591 so far today.”

“Gains are not pushing on decisively above recent peaks around 1.2615 at this point, however, and the broader pattern of recent trade still looks more like a consolidation ahead of renewed losses rather than a reversal in the November track lower in the pound. Short-term gains could extend to the mid/upper 1.26s but a move through 1.2715 resistance is needed to inject a little more technical strength in the near-term outlook.”

The Pound Sterling (GBP) is expected to trade between 1.2510 and 1.2610. In the longer run, sharp drop appears to be overextended; any further decline may find it difficult to break below 1.2475, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP may find it difficult to break below 1.2475

24-HOUR VIEW: “When GBP was at 1.2550 early yesterday, we indicated the following: ‘As long as GBP remains below 1.2600 (minor resistance is at 1.2575), it could test the 1.2505 support. Last Friday’s low of 1.2475 is unlikely to come under threat.’ The subsequent price action did not turn out as we expected. GBP did not quite test 1.2505, as it dropped to 1.2512 before staging a surprisingly sharp bounce to a high of 1.2616. GBP pulled back from the high to close largely unchanged at 1.2568 (-0.02%). The current price movements are likely part of a range trading phase. Today, we expect GBP to trade between 1.2510 and 1.2610.”

1-3 WEEKS VIEW: “We have held a negative view in GBP since the middle of this month. After GBP plummeted to 1.2475 and rebounded strongly, we indicated on Monday (25 Nov, spot at 1.2590) that ‘the sharp drop appears to be overextended.’ We pointed out, ‘any further decline may find it difficult to break last Friday’s low of 1.2475, which is serving as a significant support level.’ We will continue to hold the same view as long as 1.2650 (no change in ‘strong resistance’ level) is not breached.”

• GBP/USD gains traction to around 1.2570 in Wednesday’s early European session. 
• FOMC Minutes indicated a cautious approach to further rate cuts.  
• BoE’s Lombardelli said she needs to see more evidence before the next rate cut.

The GBP/USD pair trades on a stronger note near 1.2570 on Wednesday during the early European session. The Pound Sterling (GBP) consolidates despite US President-elect Donald Trump announcing more tariff measures. Traders brace for the release of US October Core Personal Consumption Expenditures (Core PCE) - Price Index for fresh impetus. 

Early Tuesday, Donald Trump pledged to impose tariffs on all products coming into the US from Canada, Mexico and China, which lifted the Greenback against the GBP in the previous session. The USD rally stalls on Wednesday as traders await the US Core PCE inflation data for more cues about the interest rate outlook. Meanwhile, the US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, currently trades near the lower end of its weekly range of around 106.85.  

However, the potential downside for the Greenback seems limited amid the less dovish remarks from Federal Reserve (Fed) officials. The minutes from the November FOMC meeting released Tuesday showed that Fed officials expressed confidence that inflation is easing and the labor market remains strong, allowing for further interest rate cuts albeit at a gradual pace. Fed policymakers emphasized that further rate cuts likely will happen, though they did not specify the timing and pace of reductions.

Most Bank of England (BoE) policymakers support a gradual policy-easing approach. The BoE Deputy Governor Clare Lombardelli said on Tuesday that she needs to see more evidence of cooling price pressures before she backs another interest rate cut. The lower bets that the UK central bank will cut interest rates next month provide some support to the GBP for the time being. 

• GBP/USD waffled just below the 1.2600 handle on Tuesday.
• Pound Sterling bidders remain elusive amid data-light schedule.
• Overall market sentiment is twisting ahead of key US inflation figures.

GBP/USD churned chart paper just below 1.2600 on Tuesday, marking out familiar territory as the Pound Sterling struggles to find an intraday direction against the Greenback. A limited data schedule on either side of the Atlantic kept Cable traders locked in place, but looming US inflation data could spark a fresh round of volatility ahead of the US Thanksgiving holiday slated for Thursday.

A raft of financial activity figures from the UK are slated for release on Friday, but the figures are broadly low-tier and will have a limited impact. Some particularly-studious Pound Sterling traders will be keeping one eye on the Bank of England’s latest Financial Stability Report, also due Friday, but market movement is likely to be limited from the print.

Wednesday will bring another update to US Personal Consumption Expenditure Price Index (PCEPI) inflation, a key reading of price increases underpinning the US economy. Wednesday also brings a quarterly update of US Gross Domestic Product (GDP) growth. Annualized core PCEPI inflation is set to accelerate again in October and forecast to increase to 2.8% from the previous 2.7%. QoQ US GDP growth in the third quarter is expected to hold steady at 2.8%.

GBP/USD price forecast

GBP/USD remains hobbled on the south side of the 1.2600 handle, churning bids north of 1.2500 as the pair finds some breathing room after another leg lower from early November’s choppy plateau just below 1.3000. Cable reached a six-month low of 1.2487 late last week, clipping into a 7% decline top-to-bottom from September’s peaks at 1.3434. 

In the near-term, Pound bulls hoping for an end to the current Greenback upshot will be looking for intraday bids to return to the 200-day Exponential Moving Average (EMA) near 1.2840, while long-run short positions will be looking for an opportunity to redevelop momentum and drag Cable back to 2024 lows at the 1.2300 handle.

GBP/USD daily chart

• GBP/USD rebounds from 1.2506 low, trading at 1.2573 amid Trump’s tariff proposals.
• Technical outlook mixed; support at 1.2550, bearish targets at 1.2506, 1.2486, and 1.2299.
• Bullish case needs break above 1.2600, targeting 1.2714 resistance and 200-day SMA at 1.2818.

The Pound Sterling recovered some ground following remarks of US President-Elect Donald Trump late on Monday afternoon, in which he said that once he takes office on January 20, he would impose 25% tariffs on Canada and Mexico and 10% on all Chinese products. This boosted the Greenback against most G8 FX currencies, the Mexican Peso and the Chinese Yuan. As of late, the GBP/USD turned positive in the day after hitting a low of 1.2506, trading at 1.2573.

GBP/USD Price Forecast: Technical outlook

The pair fluctuates at around 1.2570, and we are unable to gather a definitive direction, though it printed a higher high and a lower low as well. GBP/USD traders remain undecided, yet the new UK budget dented the odds for a rate cut by the Bank of England (BoE), dealing with an expansionary fiscal policy, putting upward pressure on inflation.

If GBP/USD drops below 1.2550, the first support would be the current week’s low of 1.2506. Once surpassed, sellers will eye the November 233 low of 1.2486, ahead of the year-to-date (YTD) low of 1.2299.

Conversely, if buyers move in, reclaiming 1.2600, the next resistance would be the November 20 peak at 1.2714. If cleared, a move to challenge the 200-day Simple Moving Average (SMA) at 1.2818 is on the cards.

GBP/USD Price Chart – Daily

The CBI’s survey of retail sales activity weakened in November, with the survey also revealing the biggest drop in retail sentiment in two years, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP trades steadily near term

“Data perhaps reflects something of a hangover for UK retailers after the government’s recent budget. Sterling is little changed on the session as investors mull the potential impact of tariffs on global FX.”

“The UK’s limited trade relationship with the US (relative to China, the Eurozone Mexico and Canada) suggest it will be a low priority for the Trump trade team which may allow for some GBP outperformance if tariffs are deployed more broadly in the coming months.”

“The Pound Sterling’s (GBP) consolidation around the mid/upper 1.25s extends this morning. The GBP is testing short-term trend resistance (1.2583) at writing but likely needs to clear recent minor highs at 1.2615 to signal more gains towards 1.2710/15. Support is 1.2500/10.”

As long as the Pound Sterling (GBP) remains below 1.2600, it could test the 1.2505 level; last Friday’s low of 1.2475 is unlikely to come under threat. In the longer run, sharp drop appears to be overextended; any further decline may find it difficult to break below 1.2475, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Last Friday’s low of 1.2475 is unlikely to come under threat

24-HOUR VIEW: “We highlighted yesterday that “while upward momentum has not increased much, there is scope for it to rise to 1.2625 before levelling off.” We added, “the strong resistance at 1.2650 is unlikely to come into view.” However, GBP rose less than expected to 1.2613 in early NY trade, before easing off to trade sideways for the remaining session. GBP closed at 1.2570 (+0.28%), but fell in early Asian trade today. Despite the decline, downward momentum has not increased much. That said, as long as GBP remains below 1.2600 (minor resistance is at 1.2575), it could test the 1.2505 support. Last Friday’s low of 1.2475 is unlikely to come under threat.”

1-3 WEEKS VIEW: “Yesterday (25 Nov), when GBP was at 1.2590, we highlighted that last Friday’s “sharp drop appears to be overextended.” We pointed out, “any further decline may find it difficult to break last Friday’s low of 1.2475, which is serving as a significant support level.” Our view remains unchanged. Overall, only a breach of 1.2650 (no change in ‘strong resistance’ level) would mean that the weakness in GBP from two weeks ago has stabilised.”

• GBP/USD attracts some dip-buyers following an intraday dip to the 1.2500 neighborhood.
• The USD struggles to capitalize on its modest gains and lends some support to the major.
• Bets for slower Fed rate cuts, rising US bond yields favor USD bulls and might cap gains.

The GBP/USD pair attracted fresh sellers on Tuesday and dropped to the 1.2500 neighborhood, closer to its lowest level since May 2024 during the Asian session. Spot prices, however, manage to rebound a few pips from the daily trough and currently trade around mid-1.2500s, down just over 0.10% for the day.

The underlying bullish sentiment across the global financial markets fails to assist the safe-haven US Dollar (USD) to capitalize on its modest intraday gains, which, in turn, offers some support to the GBP/USD pair. Any meaningful USD depreciation, however, seems elusive amid speculations that US President-elect Donald Trump's expansionary policy will reignite inflation and force the Federal Reserve (Fed) to cut interest rates slowly. 

Meanwhile, the initial market reaction to Scott Bessent's nomination as the US Treasury secretary turned out to be short-lived and is evident from a fresh leg up in the US Treasury bond yields. Adding to this, persistent geopolitical risks stemming from the Russia-Ukraine war and the ongoing conflicts in the Middle East should act as a tailwind for the safe-haven Greenback. This, in turn, might keep a lid on any further gains for the GBP/USD pair. 

Bearish traders, however, need to wait for a sustained break and acceptance below the 1.2500 psychological mark amid reduced bets that the Bank of England (BoE) will cut rates next month. Data released last week showed that the underlying price growth in the UK gathered speed and accelerated sharply to the 2.3% YoY rate in October. This suggests that the BoE will move cautiously on rate cuts and might offer support to the British Pound (GBP). 

Investors now look forward to the release of the FOMC meeting minutes, which will be scrutinized for cues about the future rate-cut path. The attention will then shift to the first revision of the US Q3 GDP growth and the US Personal Consumption Expenditure (PCE) Price Index data later this week. The crucial data will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the GBP/USD pair.

• GBP/USD waffled near 1.2600 on quiet start to the trading week.
• Market flows are likely to remain tepid on US holiday-thinned week.
• GBP-centric economic data remains light through Friday.

GBP/USD churned chart paper near the 1.2600 handle, finding thin gains through the day’s market window but failing to recapture the technical level as market flows do little to bolster the Pound Sterling. The UK side of the week’s economic calendar is constrained, and a fresh print of key US inflation data on Wednesday will give way to a shortened trading week on the US side as Americans prepare for their Thanksgiving holiday.

A general improvement in broad-market risk appetite trimmed the top off of Greenback bidding to kick off the new trading week, giving the Pound Sterling a mild boost and keeping Cable bids chewing on bids just south of the 1.2600 handle. GBP traders will be grappling with a low-impact release calendar throughout the week, and US session market flows will be front-loaded onto Tuesday and Wednesday before the holiday slowdown.

The Federal Open Market Committee’s (FOMC) latest Meeting Minutes will be released later in the day on Tuesday, giving traders a glimpse into the Federal Reserve’s (Fed) latest discussions about the direction of interest rates looking forward. Wednesday will follow up with another update to US Personal Consumption Expenditure Price Index (PCEPI) inflation, a key reading of price increases underpinning the US economy. Wednesday also brings a quarterly update of UIS Gross Domestic Product (GDP) growth. Annualized core PCEPI inflation is set to accelerate again in October and forecast to increase to 2.8% from the previous 2.7%. Qoq US GDP growth in the third quarter is expected to hold steady at 2.8%.

GBP/USD price forecast

GBP/USD remains hobbled on the south side of the 1.2600 handle, churning bids north of 1.2500 as the pair finds some breathing room after another leg lower from early November’s choppy plateau just below 1.3000. Cable reached a six-month low of 1.2487 late last week, clipping into a 7% decline top-to-bottom from September’s peaks at 1.3434. 

In the near-term, Pound bulls hoping for an end to the current Greenback upshot will be looking for intraday bids to return to the 200-day Exponential Moving Average (EMA) near 1.2840, while long-run short positions will be looking for an opportunity to redevelop momentum and drag Cable back to 2024 lows at the 1.2300 handle.

GBP/USD daily chart

• GBP/USD climbs as financial markets respond positively to Trump's choice for Treasury Secretary, Scott Bessent.
• The pair still shows a downward trend, with key support being 1.2550 and 1.2486, potentially leading to a retest of the annual low at 1.2299.
• If bulls move in, they could test 1.2600 and November's high of 1.2659, followed by the 200-day SMA at 1.2818.

The Pound Sterling advances modestly against the Greenback on Monday, with market participants digesting US President-Elect Donald Trump's naming of Scott Bessent as Treasury Secretary. Bessent, an advocate for lower taxes and tariffs, was well-received by the markets as risk appetite improved. The GBP/USD trades at 1.2586, up 0.52%.

GBP/USD Price Forecast: Technical outlook

Despite posting gains, the GBP/USD remains downward biased after slipping below the 200-day Simple Moving Average (SMA) at 1.2818. If buyers want to regain the control, they need to conquer the 1.2600 figure, followed by a clear break of November’s 21 peak at 1.2659, which could exacerbate a rally to 1.2700. On further strength, the 200-day SMA is up next.

Meanwhile, bears remain in charge, targeting 1.2550 as the first support level. Once surpassed, they will set their sights on the November 22 low of 1.2486, followed by the year-to-date (YTD) low of 1.2299.

Indicators such as the Relative Strength Index (RSI) remain bearishly biased, near oversold territory, and hints the downtrend remains strong.

GBP/USD Price Chart – Daily