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

• GBP/USD rebounds from oversold zone amid potential bullish reversal.
• The lower boundary of the descending wedge at the psychological level of 1.2600 acts as the primary support.
• The pair may approach the upper boundary of the descending wedge, aligned with the nine-day EMA at 1.2746 level.

GBP/USD breaks its six-day losing streak, trading around 1.2630 during the Asian hours on Monday. The daily chart analysis shows the sellers' control weakens as the pair moves downwards within the descending wedge pattern. This signals a potential bullish reversal for the pair.

Additionally, the 14-day Relative Strength Index (RSI) is at the 30 level, suggesting an oversold situation for the pair and a potential for an upward correction as soon as possible.

On the downside, the GBP/USD pair seems to test the lower boundary of the descending wedge at the psychological level of 1.2600. A break below this level would reinforce the bearish bias and put downward pressure on the pair to navigate the region around the yearly low at 1.2299, which was recorded on April 22.

For resistance, the GBP/USD pair could test the upper boundary of the descending wedge, aligned with the nine-day Exponential Moving Average (EMA) at 1.2746 level. Further barrier appears at the psychological level of 1.2800, aligned with the 14-day EMA at 1.2804 level.

GBP/USD: Daily Chart

• GBP/USD ticks higher at the start of a new week amid a modest USD downtick.
• The Trump trade optimism should limit the USD downside and cap the major.
• The BoE uncertainty could also contribute to capping the upside for the GBP.

The GBP/USD pair kicks off the new week on a subdued note and consolidates in a range above the 1.2600 round-figure mark, or the lowest level since mid-May touched on Friday. Spot prices, for now, seem to have snapped a six-day losing streak amid a modest US Dollar (USD) downtick, though the fundamental backdrop supports prospects for an extension of the recent well-established downtrend.

The USD remains on the defensive below the year-to-date (YTD) top set last Thursday as bulls pause for a breather following the post-US election blowout rally. Any meaningful USD depreciation, however, seems elusive in the wake of expectations that US President-elect Donald Trump's policies will likely rekindle inflationary pressures and limit the scope for further rate cuts by the Federal Reserve (Fed). This has been a key factor behind the recent upsurge in the US Treasury bond yields, which suggests that the path of least resistance for the USD is to the upside. 

The British Pound (GBP), on the other hand, might struggle to lure buyers on the back of the uncertainty concerning the Bank of England's (BoE) path forward on interest rates. Data released last week showed that UK wage growth excluding bonuses cooled in September and the unemployment rate to 4.3% from 4.1%. Furthermore, the UK GDP unexpectedly contracted for the first time in five months in September, increasing expectations for BoE rate cuts. That said, BoE members do not see the central bank cutting interest rates at the December policy meeting.

This, in turn, makes it prudent to wait for strong follow-through buying to confirm that the GBP/USD pair has formed a near-term bottom. Bearish traders, however, might now wait for a sustained break and acceptance below the 1.2600 round figure before placing fresh bets amid absent relevant market-moving economic releases on Monday, either from the UK or the US.

• GBP/USD remains under pressure, testing significant support levels after crossing below the 200-day SMA.
• Further downside may see the pair target 1.2600 and potentially extend to May's low of 1.2445.
• Recovery above 1.2700 could challenge resistance at 1.2817, with RSI indicating potential consolidation ahead.

The Pound Sterling extends its agony and printing losses for the sixth straight day against the Greenback. Soft UK GDP coupled with robust US Retail Sales figures boosted the US Dollar and weighed on GBP/USD, which trades at 1.2636, down 0.22%.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is bearish-biased once it falls below the 200-day Simple Moving Average (SMA). A daily close below the latest intermediate support at 1.2664, the August 8 swing low, would pave the way for further downside. The following key support level would be the 1.2600 figure, followed by the latest cycle low at 1.2445 on May 9, followed by the year-to-date (YTD) low at 1.2299.

Conversely, if GBP/USD recovers and rises above 1.2700, the next resistance would be the 200-day SMA at 1.2817. Once surpassed, the next resistance would be the 1.2900 mark.

Oscillators, such as the Relative Strength Index (RSI), suggest the pair might consolidate. The RSI is nearby oversold conditions and has begun to shift flat.

GBP/USD Price Chart – Daily

This morning’s round of UK data was broadly weaker than forecast—Industrial Production fell 0.5% in September as manufacturing slumped, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP steadies near term

“Services and construction output also fell, producing a 0.1% drop in monthly GDP (versus 0.2% forecast) and helping pull growth for Q3 overall down to 0.1% (versus 0.2% forecast). Sterling is up fractionally against a generally softer USD on the day but softer growth has helped limit gains to just over 0.1% intraday, the weakest gain of the major currencies.”

“Similar to the EUR chart, the GBP is showing signs of steadying after a bullish technical reaction to Thursday’s low point (1.2630) put in a short-term reversal on the intraday chart. Sterling has picked up a little support in European trade but needs to push on through 1.2710/20 for gains to develop more in the short run I think.”

“Gains are likely to be capped in in the low 1.28s for now—look for firm resistance at 1.2830.”

Scope for the Pound Sterling (GBP) to retest the 1.2630 level; the major support at 1.2615 is unlikely to come under threat. In the longer run, GBP is expected to continue to weaken to 1.2615, possibly 1.2565, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP is expected to continue to weaken to 1.2615

24-HOUR VIEW: “When GBP was at 1.2710 yesterday, we highlighted the following: ‘Although the weakness has not stabilised, downward momentum has slowed a tad. This, combined with oversold conditions, suggests 1.2665 may still be out of reach for now.’ While our view of a weaker GBP was correct, the lurch lower that sent it to a low of 1.2630 was unexpected. Downward momentum is showing tentative signs of slowing, but there is scope for GBP to retest the 1.2630 level before stabilisation is likely. The major support at 1.2615 is unlikely to come under threat. Resistance is at 1.2690; a breach of 1.2715 would mean that GBP is not weakening further.”

1-3 WEEKS VIEW: “In our latest narrative from two days ago (13 Nov, spot at 1.2735), we indicated that ‘Downward momentum has surged, and the next technical target is at 1.2665.’ Yesterday, GBP fell and exceeded the target, dropping to a low of 1.2630. We continue to expect GBP to weaken, eying a move to 1.2615, possibly 1.2565. We will maintain our view provided that 1.2770 (‘strong resistance’ level was at 1.2845 yesterday) is not breached.”

• GBP/USD edges higher on Friday as US Dollar traders take profit following a strong rally for the Greenback to new 2024 highs. 
• The bounce remains strained because of the release of weak UK GDP growth data clouding the outlook. 
• Some analysts remain positive about the outlook for the UK despite the data, and this supports Sterling. 

GBP/USD edges higher on Friday, reaching the 1.2680s, as traders reduce their short exposure before the weekend. GBP/USD claws its way up from intraday oversold levels reached on Thursday when it registered near 2.0% losses on the week. This came after the US Dollar (USD) outperformed due to positive US economic data, the residual effect of Trumponomics, and upbeat comments from the Federal Reserve (Fed) Chairman Jerome Powell.

By rights, the pair should still be falling after the release of weak UK growth on Friday. However, it is possible traders are now judging the US Dollar as overvalued. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, reached a new 2024 high on Thursday, which could be restraining Dollar-traders’ “irrational exuberance”.  

Although it seems counter-intuitive, the Pound Sterling (GBP) is actually strengthening despite the release of negative UK Gross Domestic Product (GDP) growth data showing the economy shrank by 0.1% in September. This was lower than the 0.2% expected and 0.2% of the previous month. 

What’s more, in Q3, UK preliminary GDP rose by 0.1% QoQ – decelerating from the 0.5% recorded in Q2 and undershooting the 0.2% estimate. Ordinarily, this would be expected to be accompanied by a sell-off in the Pound. However, due to an overbought Dollar trade and the market’s continued faith in the outlook for growth in the UK, it has not. 

For advisory service Capital Economics, for example, the data has not materially changed its views on the outlook for Bank of England (BoE) policy or interest rates – a key driver of FX valuations. Lower interest rates are generally negative for Sterling as they reduce capital inflows and vice versa for higher rates. Yet, despite the poor economic data, they do not see the BoE cutting interest rates in December.

According to Capital’s Deputy Chief UK Economist Ruth Gregory, the GDP data means the economy grew at “..a snail’s pace (in Q3). However, this doesn’t mean the UK is on the cusp of another recession. And while today’s data raises the chances the Bank (BoE) will cut rates again in December, we are sticking to our view that the Bank will keep rates unchanged at 4.75% in December before cutting rates by 25 basis points again in February,” 

GBP/USD touches five-month lows after Chairman Powell remarks

GBP/USD is making a slow recovery from over four-month lows reached on Thursday after US data showed an above-expectations rise in factory-gate prices, as measured by the Producer Price Index (PPI), in October and US Jobless Claims falling below estimates in the week ending November 8, driving the Dollar higher and the Cable pair to a new low. 

The two data points are particularly relevant to Fed policy given its dual mandate of keeping inflation under control and fostering full employment. Later in the day, Fed Chair Powell drove the USD to an even higher high after he said that the US economy was in relatively good shape and the Fed would not need to cut interest rates as aggressively as he had previously thought. 

Technical Analysis: GBP/USD trends lower

GBP/USD retreats to support in the mid-1.2600s (red dashed line in the chart below) and makes a half-hearted stand. 

However, the pair is in a downtrend on a short and medium-term trend basis, and given the technical principle that “the trend is your friend,” the odds favor bears pushing prices even lower.

GBP/USD Daily Chart 

Assuming a break below the 1.2630 Thursday low, GBP/USD will probably start descending to the next downside target at around 1.2613, the late June lows (red dashed line). Below that, the next target lies at 1.2500 (round number and psychological level), followed by 1.2452 (early May lows).

The Relative Strength Index (RSI) momentum indicator is nearly oversold but not quite. If it enters oversold territory, it will advise short-holders not to add to their positions. 

The longer-term trend, it could be argued, is still bullish, indicating the risk and possibility of GBP/USD recovering if a longer-term upcycle kicks in.

• GBP/USD remains steady after mixed GDP and industrial data released from the United Kingdom.
• UK GDP expanded by 1.0% in the third quarter, surpassing the 0.7% growth recorded in Q2.
• The monthly UK Industrial and Manufacturing Production both declined by 0.5% and 1.0%, respectively, in September.

GBP/USD breaks its five-day losing streak, trading around 1.2680 during the early European session on Friday. The pair remains steady after the release of mixed Gross Domestic Product (GDP) and Industrial data from the United Kingdom (UK).

The UK economy grew by 0.1% quarter-on-quarter in the three months ending September, following a 0.5% expansion in Q2. This growth fell short of market expectations for a 0.2% increase. On a year-on-year basis, UK GDP rose by 1.0% in Q3, matching forecasts but higher than the 0.7% growth recorded in Q2. 

In September, monthly UK GDP shrank by 0.1%, reversing a 0.2% expansion in August and missing the expected 0.2% growth. The Index of Services for the three months ending in September held steady at 0.1% 3M/3M, unchanged from the prior reading. However, Industrial and Manufacturing Production both declined in September, falling by 0.5% and 1.0% month-on-month, respectively. These figures were weaker than anticipated.

The US Dollar (USD) edges lower due to remarks from Fed Chair Jerome Powell on Thursday. Fed’s Powell stated that the recent performance of the US economy has been "remarkably good," allowing the Federal Reserve the flexibility to gradually lower interest rates. Meanwhile, Richmond Fed President Thomas Barkin stated that while the Fed has made strong progress so far, there’s still more work to be done to keep the momentum going.

Additionally, the US Producer Price Index (PPI) rose by 2.4% year-over-year in October, up from a revised 1.9% increase in September (previously 1.8%) and surpassing market expectations of 2.3%. Meanwhile, the Core PPI, which excludes food and energy, increased by 3.1% YoY, slightly above the forecasted 3.0%.

The US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, trades around 106.70. after pulling back from its yearly high of 107.06 recorded on Thursday. This decline could be attributed to a slowdown in "Trump trades."

• GBP/USD remains on the defensive around 1.2675 in Friday’s Asian session. 
• The negative outlook of the pair prevails below the 100-period EMA, with the bearish RSI. 
• The first upside barrier is seen at 1.2720; the first downside target is located at 1.2618. 

The GBP/USD pair edges lower to near 1.2675, the lowest level since August during the Asian trading hours on Friday. The cautious remarks from the Federal Reserve (Fed) Chair Jerome Powell on Thursday and stronger US economic data boost the US Dollar (USD) broadly and weigh on the major pair. Traders brace for the preliminary UK Gross Domestic Product (GDP) for the third quarter (Q3), which is due later in the day. 

Technically, GBP/USD maintains a bearish outlook on the daily chart, with the major pair holding below the key 100-period Exponential Moving Average (EMA). The path of least resistance is to the downside as the Relative Strength Index (RSI) is located below the midline around 33.50. 

Sustained bearish momentum could drag the major pair to the lower limit of the Bollinger Band at 1.2618. A break below this level could push prices lower toward the 1.2500 psychological level, followed by 1.2467, the low of May 8. 

On the bright side, the first key resistance level to watch if buyers step in here would be 1.2720, the high of November 14. A break above these barriers could pave the way for a test of 1.2873, the high of November 12. Any follow-through buying above the mentioned level potentially opens the door to 1.2955, the 100-period EMA.  

GBP/USD 4-hour chart

• GBP/USD backslid yet again on Thursday, falling to a 19-week low.
• Cable is on pace for its single worst week since mid-2023.
• GBP bidders will be waiting for Friday’s UK GDP print.

GBP/USD fell to a fresh 19-week low on Thursday, piercing the 1.2700 handle before finding near-term technical support from 1.2650. The Pound continues to ease with a lack of meaningful faith behind it, while broader markets continue to bolster the Greenback higher across the board.

Producer Price Index (PPI) producer-level inflation figures came in roughly as expected, despite a slight upswing in annualized core PPI numbers. Headline PPI matched forecasts in October, rising 0.2% MoM compared to the previous month’s revised 0.1%. Core PPI for the year ended in October accelerated more than expected, ticking up to 3.1% compared to the expected 3.0% rising above the previous period’s 2.9%, which was also revised slightly higher from 2.8%.

Coming up on Friday, UK Gross Domestic Product (GDP) figures will give Cable bidders something to chew on, while Greenback buyers will be looking for a surprise improvement in US Retail Sales. UK GDP for the third quarter is expected to sink to 0.2% QoQ from the previous quarter’s print ofg 0.5%. US Retail Sales are likewise forecast to ease slightly in October, expected to print at 0.3% MoM compared to September’s 0.4%.

GBP/USD price forecast

The GBP/USD daily chart shows a pronounced downtrend with significant bearish momentum. After a brief consolidation period around the 1.2900 level, the pair has broken below the 50-day and 200-day Exponential Moving Averages (EMAs), which were providing support near 1.2990 and 1.2865, respectively. This bearish cross between the 50-day EMA (blue line) and the 200-day EMA (black line) is a strong sell signal, commonly known as a "death cross," suggesting further downside potential. The recent break below these key moving averages reinforces the likelihood of continued downward pressure, with the next significant support zone around 1.2600.

The MACD indicator also confirms the bearish bias, as the MACD line has crossed below the signal line in negative territory. This indicates a strong bearish trend with increasing downside momentum. The histogram bars are deepening below the zero line, suggesting that selling pressure remains strong and the pair may struggle to find support. If the bearish momentum persists, GBP/USD could extend its losses, potentially testing the psychological 1.2500 level. A break above the 1.2865 resistance (200-day EMA) would be required to alleviate some of the immediate downside pressure, though the bias remains bearish as long as price remains below the 50-day EMA.

GBP/USD daily chart

• GBP/USD struggles after new four-month low, as US PPI data indicates persistent inflation.
• Technical analysis shows potential for further declines, with next key support at 1.2600.
• Recovery targets for GBP/USD include retesting 1.2700 and aiming for the 200-day SMA at 1.2817.

The British Pound posted losses of 0.10% against the US Dollar after US economic data suggested that inflation remains above the Federal Reserve’s 2% goal. Headline PPI rose the most in four months on an annual basis for October, while core PPI accumulated three straight months of higher readings. The GBP/USD trades at 1.2692 after hitting a daily peak of 1.2710.

GBP/USD Price Forecast: Technical outlook

The GBP/USD tumbled to a four-month low of 1.2629 before recovering some ground, yet it traded below its opening price. On its way toward 1.2600, the pair printed a lower low beneath the August 8 daily low of 1.2664, paving the way for further losses. Indicators such as the Relative Strength Index (RSI) hint that further downside is seen.

That said, sellers must clear 1.2629 and the 1.2600 figure. Once achieved the next support would be the May 9 low of 1.2445, before challenging the year-to-date (YTD) low of 1.2299.

Conversely, buyers must lift GBP/USD above 1.2700, followed by the November 13 high at 1.2768. They must reclaim the 200-day Simple Moving Average (SMA) at 1.2817 if surpassed.

GBP/USD Price Chart – Daily

Weakness in GBP has not stabilised, but the major support at 1.2665 could still be out of reach for now. In the longer run, downward momentum has surged; the next technical target is at 1.2665, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The next technical target is at 1.2665

24-HOUR VIEW: “After GBP plummeted to 1.2719 on Tuesday, we indicated yesterday (Wednesday) that GBP ‘is expected to continue to decline, but it remains to be seen if the major support at 1.2665 is within reach today.’ Our view was not wrong, as GBP dropped to 1.2687 before recovering slightly to close at 1.2709 (-0.29%). Although the weakness has not stabilised, downward momentum has slowed a tad. This, combined with oversold conditions suggests 1.2665 may still be out of reach for now. Resistance is at 1.2735; a breach of 1.2765 would indicate that the weakness has stabilised.”

1-3 WEEKS VIEW: “Two days ago (12 Nov, spot at 1.2870), we highlighted that the ‘Slight buildup in momentum indicates GBP is likely to edge lower, but 1.2800 is expected to provide significant support.’ Following GBP sharp plunge below 1.2800, we indicated yesterday (13 Nov, spot at 1.2735) that ‘The next technical target is at 1.2665.’ We pointed out, ‘We will continue to expect GBP to weaken as long as 1.2845 (‘strong resistance’ level) is not breached.’ There is no change in our view, but the ‘strong resistance’ level has moved lower to 1.2820 from 1.2845. Looking ahead, if GBP breaks below 1.2665, the next level to watch is 1.2615.”

• GBP/USD trades in negative territory for the fifth consecutive day near 1.2685 in Thursday’s Asian session. 
• US inflation rose to 2.6% YoY in October, as expected. 
• Investors await the BoE’s Governor Andrew Bailey speech on Thursday. 

The GBP/USD pair extends the decline to near 1.2685 during the Asian trading hours on Thursday. A rally in the US Dollar (USD) to the highest level since November 2023 weighs on the major pair. The Bank of England (BoE) Governor Andrew Bailey is set to speak later on Thursday. 

Data released by the US Department of Labor Statistics on Wednesday showed that the US Consumer Price Index (CPI) came in line with expectations, rising by 2.6% YoY in October. Meanwhile, the core CPI, which excludes the more volatile food and energy categories, climbed by 3.3% YoY in October, mating with the estimation. The markets expect the US Federal Reserve (Fed) to keep on track to reduce rates at their next meeting in December. 

“No surprises from the CPI, so for now the Fed should be on course to cut rates again in December. Next year is a different story, though, given the uncertainty surrounding potential tariffs and other Trump administration policies,” noted Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. 

Fed officials remain cautious on rate cuts. On Wednesday, Dallas Fed President Lorie Logan said that the US central bank should proceed cautiously on further interest rate cuts to keep from inadvertently reigniting inflation. Additionally, St. Louis Fed President Alberto Musalem stated that sticky inflation figures make it difficult for the US central bank to continue to ease rates. Traders raise their bet on another quarter-percentage-point rate cut in December, albeit at a slower pace, through mid-2025.

On the UK’s front, the BoE policymaker Catherine Mann said monetary policy is impacting inflation more quickly than economic theory suggests, allowing the central bank to wait before making big cuts to interest rates. Traders have fully priced in only two quarter-point rate cuts by the end of 2025, which would put the BoE lag behind other major central banks. 

Traders will take more cues from the BoE’s Bailey speech later on Thursday for fresh impetus. Less dovish comments from the UK central bank could underpin the Pound Sterling (GBP) against the GBP. 

• GBP/USD tested below the 1.2700 handle on Wednesday, easing back further.
• Cable shed another third of a percent and sold off for a fourth straight day.
• US PPI inflation, UK GRDP growth update loom ahead.

GBP/USD eased further into the low end on Wednesday, trimming further south of the 200-day Exponential Moving Average (EMA) in a one-sided bearish decline as the pair closes in the red for a fourth consecutive trading day. The Pound Sterling shed extra weight against the broadly-recovering Greenback, sparked by a US Consumer Price Index (CPI) inflation print that didn’t deliver markets the easing inflation hint they were hoping for, but still came in at forecasts.

Coming up on Thursday will be a fresh print of US Producer Price Index (PPI) business level inflation, which is forecast to accelerate in October to 3.0% from 2.8% YoY. On the UK side, Cable traders will be settling in for a wait to Thursday’s UK Gross Domestic Product (GDP) print for the third quarter, which is forecast to slump to a scant 0.2% QoQ from the previous 0.5%.

US Consumer Price Index (CPI) inflation figures came in stickier than many had hoped, but still well within median market forecasts, helping to keep investor sentiment elevated. Headline CPI held steady at 0.2% MoM as expected, while annualized headline CPI inflation accelerated to 2.6% YoY from the previous 2.4%, as markets predicted. Core CPI inflation also met market expectations, holding at 0.3% MoM and 3.3% on an annualized basis.

GBP/USD price forecast

The GBP/USD daily chart shows a pronounced bearish momentum, with the price decisively breaking below the 200-day EMA (black line) around 1.2867, a significant support level that had held since early November. This breakdown below the 200-day EMA indicates a shift toward a medium-term bearish outlook, as the currency pair struggles to hold above this key long-term moving average. Moreover, the 50-day EMA (blue line) remains below the price level, reinforcing the downward bias and suggesting that selling pressure is likely to persist as long as the price trades beneath these critical EMAs.

The MACD indicator at the bottom of the chart reflects intensifying bearish momentum, with the MACD line diverging further below the signal line in negative territory. This bearish crossover, accompanied by declining histogram bars, underscores the weakness in GBP/USD and hints at a potential extension of the downtrend. The lack of any bullish divergence on the MACD suggests that buying interest is limited, and without a substantial catalyst, the pair may struggle to regain positive momentum. Traders might look to the MACD and any potential decrease in selling pressure as initial signs of a trend reversal, though such signals are currently lacking.

The next support level to watch lies around the psychological handle of 1.2700, which is close to the current price level. A break below this area could expose GBP/USD to further downside risks, potentially targeting the 1.2600 mark as the next support level. On the flip side, if the pair manages to recover and reclaim the 200-day EMA, it could signal a shift in sentiment; however, this would require substantial buying pressure, likely tied to positive economic data from the UK or a broad weakening in the US dollar. Until such developments occur, the technical setup favors the bears, with further downside likely if GBP/USD fails to stabilize above the immediate support.

GBP/USD daily chart

• GBP/USD extends losses, breaking below the 200-day SMA, with further downside potential.
• Technical indicators suggest continuing bearish momentum with support at 1.2665 in focus.
• Recovery above 1.2700 could test resistance at the recent high of 1.2873.

The Pound Sterling registers losses against the US Dollar in early trading during the North American session, sponsored by Bank of England´s (BoE) Catherine Mann's hawkish rhetoric. This and the latest US inflation report came as expected, keeping the GBP/USD trading at around 1.2697, down by over 0.37%.

GBP/USD Price Forecast: Technical outlook

The GBP/USD bearish momentum extended after the pair cleared 1.2817, the 200-day Simple Moving Average (SMA), opening the door to challenge 1.2800. Momentum remains tilted to the downside, with the pair hitting a daily low of 1.2686, shy of testing intermediate support seen at the August 8 swing low of 1.2665. If cleared, the next support would be the 1.2600 figure.

Conversely, buyers must push the exchange rate toward 1.2700. If surpassed, the next stop would be the November 12 high at 1.2873.

Oscillators such as the Relative Strength Index (RSI) hints that sellers are in charge. Therefore, further GBP/USD downside is seen.

GBP/USD Price Chart – Daily

The Pound Sterling (GBP) is expected to continue to decline, but it remains to be seen if the major support at 1.2665 is within reach today. Un the longer run, downward momentum has surged; the next technical target is at 1.2665, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The next technical target is at 1.2665

24-HOUR VIEW: “GBP fell to a low of 1.2858 on Monday. When GBP was trading at 1.2870 yesterday, we pointed out that ‘there is scope for GBP to drop to 1.2835.’ We also pointed out that ‘the major support at 1.2800 is unlikely to come under threat.’ The sudden surge in downward momentum was surprising, as GBP broke below 1.2800 and plunged to 1.2719. GBP closed sharply lower by 0.96% at 1.2747. The impulsive downward momentum is likely to outweigh the deeply oversold conditions. In other words, GBP is expected to continue to decline, but it remains to be seen if the major support at 1.2665 (low in early August) is within reach today. On the upside, any rebound is likely to remain below 1.2810 with minor resistance at 1.2760.”

1-3 WEEKS VIEW: “Yesterday (12 Nov, spot at 1.2870), we highlighted that the ‘Slight buildup in momentum indicates GBP is likely to edge lower.’ We also highlighted that ‘the 1.2800 level is expected to provide significant support.’ The anticipated support at 1.2800 did not materialise as GBP plunged through this level and reached 1.2719. Downward momentum has surged as well. The next technical target is at 1.2665, the low in early August. We will continue to expect GBP to weaken as long as 1.2845 (‘strong resistance’ level was at 1.2975 yesterday) is not breached.”

• GBP/USD depreciates as Trump’s potential fiscal policies could delay further Fed rate cuts.
• The US Consumer Price Index data release will be eyed in the North American session.
• The British Pound weakened as mixed UK employment figures indicated a softening labor market for three months ending in September.

GBP/USD extends its losing streak for the fourth successive session, trading around 1.2740 during the Asian hours on Wednesday. This downside of the pair is attributed to a stronger US Dollar (USD) amid optimism around the Trump trades.

The US Dollar strengthens as analysts pointed out that if Trump’s fiscal policies are implemented, they could boost investment, spending, and labor demand, potentially increasing inflation risks. This scenario could prompt the Federal Reserve (Fed) to adopt a more restrictive monetary policy stance.

Traders are now focused on the upcoming US inflation data release on Wednesday for further guidance on future US policy. The headline Consumer Price Index (CPI) is expected to show a 2.6% year-over-year increase for October, with the core CPI anticipated to rise by 3.3%.

The Pound Sterling (GBP) weakened following mixed UK labor market data. On Tuesday, employment figures indicated a softening labor market for the three months ending in September. The ILO Unemployment Rate increased to 4.3% from 4.0% in the previous period, surpassing the expected 4.1%. During the same period, Employment Change showed that UK employers added 219K new jobs, significantly lower than the previous release of 373K.

The Bank of England’s (BoE) latest Monetary Policy Report is set to be released on Wednesday, with investors keen to assess potential insights into how the BoE plans to navigate the UK's imbalanced economy amid ongoing inflation concerns.

• GBP/USD shed nearly a full percent on Tuesday.
• Markets are pulling back into the Greenback meaningfully.
• UK Unemployment Rate rose appreciably in September.

GBP/USD lost its footing on Tuesday, shedding almost a full percent after UK labor figures came in mixed, but all Cable traders could focus on was a steeper-than-expected upswing in the UK Unemployment Rate. Outside of the UK, a broad-market bullish recovery in Greenback flows is keeping the USD well-bid, exacerbating intraday losses for Cable.

UK labor figures mostly exceeded expectations, but wages growth keeps inflation concerns elevated. While unemployment claims were below forecasts, jobless benefits seeker counts still rose compared to the previous month’s revised figure. 

The Bank of England’s (BoE) latest Monetary Policy Report is due early Wednesday, and investors will be looking out for hints of how the BoE plans to deal with a lopsided UK economy that continues to grapple with inflation figures. On the US side, key Consumer Price Index (CPI) inflation figures will land on markets. Full-fat CPI inflation is forecast to tick higher to 2.6% YoY compared to September’s print of 2.4%. Core CPI inflation is expected to hold steady at 3.3% YoY. The monthly figure for both inflation categories are broadly expected to hold flat month-on-month.

GBP/USD price forecast

The GBP/USD daily chart shows a significant bearish move, with the pair breaking below key support levels and intensifying selling pressure. The recent price action has pushed GBP/USD under the 200-day EMA (1.2868), which previously provided solid support and has now turned into resistance. This break below the 200-day EMA is a bearish signal that suggests a shift in the long-term trend to the downside, as bears take control of the market. Additionally, the 50-day EMA (1.3014) remains well above the current price, further confirming the bearish momentum.

The MACD indicator on the daily chart aligns with the bearish outlook, as the MACD line is below the signal line, and both lines are trending lower in negative territory. The histogram is expanding to the downside, indicating that bearish momentum is accelerating. This MACD setup implies that sellers are growing increasingly confident, and buyers have yet to show any significant strength to counter the downward trend. Unless there is a substantial recovery in the MACD, GBP/USD is likely to remain pressured in the near term.

Given the recent downside break and bearish technical signals, GBP/USD may continue to face downside risk toward the next psychological support level at 1.2700. If bearish momentum persists and this level is breached, the pair could target the 1.2600 area, where further support might emerge. However, a close back above the 200-day EMA would be required to alleviate some bearish pressure and potentially signal a consolidation phase. Until then, the path of least resistance remains to the downside, favoring sellers in the short term.

GBP/USD daily chart

• GBP/USD breaches 200-day SMA, turning bearish with potential to test support at 1.2700.
• Mixed labor data and technical indicators suggest further downside risk for the Pound.
• Recovery above 1.2800 needed for bullish resumption, with 1.2900 and 1.2993 as key targets.

The Pound Sterling plummets more than 0.60% on Tuesday, after labor market data was mixed, with the Unemployment Rate rising sharply, as the economy added over 220K jobs to the economy, 150K less than in the previous reading. At the time of writing, the GBP/USD trades at 1.2792, below the 1.2800 handle for the first time since mid-August 2024.

GBP/USD Price Forecast: Technical outlook

The GBP/USD plunged below the 200-day Simple Moving Average (SMA) of 1.2817. A daily close confirmation would turn the pair bearish, and it might open the door to test the next intermediate support at the 1.2700 figure, followed by major support at August 8 swing low of 1.2664.

For a bullish continuation, buyers must regain 1.2800 and lift the spot prices above the 1.2833/43 are, support levels hit on November 6 and October 31, respectively, before testing 1.2900. Up next would be the 100-day SMA at 1.2993.

Indicators such as the Relative Strength Index (RSI) remains deeply bearish, though not yet turned oversold. Therefore, further GBP/USD downside is seen.

GBP/USD Price Chart – Daily

Scope for GBP to drop to 1.2835; given the oversold conditions, the major support at 1.2800 is unlikely to come under threat. In the longer run, slight buildup in momentum indicates GBP is likely to edge lower; the 1.2800 level is expected to provide significant support, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP is likely to edge lower

24-HOUR VIEW: “Last Friday, GBP fell to a low of 1.2885. Yesterday (Monday), when GBP was at 1.2910 yesterday, we highlighted that ‘there is room for GBP to dip below the 1.2885 low before a more sustained rebound is likely.’ We added, ‘the major support at 1.2850 is unlikely to come under threat.’ While our view was validated as GBP fell to a low of 1.2858, there is no sign of a rebound just yet. Today, there is scope for GBP to drop to 1.2835. Given the oversold conditions, the major support at 1.2800 is unlikely to come under threat. On the upside, should GBP break above 1.2910 (minor resistance is sat 1.2890), it would suggest that the weakness in GBP has stabilised.”

1-3 WEEKS VIEW: “Last Friday (08 Nov, spot at 1.2980), we highlighted that, ‘the recent buildup in downward momentum has faded, and the outlook is unclear.’ We expected GBP to ‘trade in a range between 1.2850 and 1.3055.’ Yesterday, GBP dropped to a low of 1.2858. There has been a slight buildup in downward momentum. From here, GBP is likely to edge lower, but the 1.2800 level is expected to provide significant support. To maintain the buildup in momentum, GBP remain below 1.2975”