GBP/USD Price Forecast: Recovers after diving to 1.2500 on Trump’s remarks

• 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