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Currencies GBP/USD

GBP/USD Appreciates on Fed-BoE Policy Divergence That Bolsters Sterling Forecast

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  • September 15, 2025
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The Pound Sterling gained against the US Dollar on Monday as policy divergence among the Federal Reserve and the Bank of England enhanced demand for the currency. GBP/USD recovered from 1.3548 to trade at approximately 1.3586, buoyed by hopes that the Fed will lower interest rates by 25 basis points this week, while the BoE is expected to maintain rates given recurring UK inflation at around 4%. With investors factoring in a falling interest rate gap, future UK jobs and inflation releases, as well as central bank meetings, are expected to determine the direction of the pair. KEY LOOKOUTS • Markets widely expect a 25 bps rate cut, with a 94% probability priced in, which could weigh on the Dollar. • The Bank of England is likely to keep rates unchanged due to inflation holding near 4%, supporting Sterling. • Employment figures on Tuesday and CPI data on Wednesday will be critical in shaping BoE policy expectations. • A close above 1.3600 for an extended period could leave the way open to 1.3681 and 1.3700, but inability to hold could push GBP/USD towards 1.3550 or the 20-day SMA of 1.3497. GBP/USD picked up pace early in the week as differing policy directions between the Federal Reserve and the Bank of England underpinned the recovery in Sterling. With markets putting just a 94% chance on a 25 basis point Fed rate cut, the Dollar lost strength, as the BoE is likely to remain unchanged with stubbornly elevated inflation close to 4%. This narrowing interest rate spread has propelled the pair higher above 1.3580, with market players watchfully monitoring forthcoming UK employment and CPI releases, as well as central bank gatherings, to see if Sterling can continue its rally towards key resistance points. GBP/USD rose as policy divergence in favor of Sterling between the BoE and Fed, with the pair reversing higher above 1.3580. Hopes of a Fed rate cut, along with the BoE keeping rates unchanged, support the Pound in advance of major UK data releases. • GBP/USD reversed from 1.3548 to trade at 1.3586, demonstrating early-week resilience. • The Fed is expected to cut interest rates by 25 bps, with a 94% chance priced in. • BoE will probably stick to its existing rate stance from UK’s consistent inflation level around 4%. • Divergent monetary policies are decreasing the interest rate spread, favoring Sterling. • Important UK economic releases this week are employment data on Tuesday followed by CPI on Wednesday. • Above 1.3600 close will open the way for resistance zones around 1.3681 and 1.3700. • Conversely, not holding 1.3600 could take GBP/USD down to 1.3550 or the 20-day SMA of 1.3497. The Pound Sterling rose against the US Dollar as market players factored in different monetary policy trajectories between the Federal Reserve and the Bank of England. Anticipation of a near-term Fed rate reduction has boosted the demand for British Pound, while the BoE’s probable decision to hold interest rates in the face of sustained inflation at around 4% favors Sterling’s demand. Investors are keenly observing future UK economic releases, including jobs and Consumer Price Index data, to gauge the central bank’s next policy direction. GBP/USD DAILY CHART PRICE SOURCE: TradingView This policy disparity underscores the larger economic context, as the US prepares to loosen monetary conditions while the UK remains more wary of inflation. Market sentiment anticipates the Pound’s strength, as traders account for both central bank action and continued economic events. As a result, GBP/USD remains at center stage for investors looking for opportunities through changing global expectations of interest rates. TECHNICAL ANALYSIS GBP/USD continues to be in a bullish bias after recovering from recent lows, and 1.3600 has become an important level to hold for the pair to maintain upward momentum. A close above 1.3600 on the daily time frame could set the stage for resistance levels at 1.3681 and 1.3700, and a breakdown below this level could open up support areas around 1.3550 and the 20-day SMA at 1.3497. Market players are keeping close eyes on these levels to determine possible continuation or retracement of the pair’s short-term trend. FORECAST If GBP/USD continues its uptrend above 1.3600, the pair might aim for significant resistance at 1.3681 and 1.3700, with a possible extension to the July 1 high of 1.3788. Ongoing Sterling strength would probably be favored by the BoE leaving rates unchanged while the Fed takes steps towards easing, closing the interest rate differential in favor of the Pound. Favorable UK economic news will also add to bullish sentiment. To the downside, inability to maintain a breakout above 1.3600 can have GBP/USD testing support at 1.3550. Further decline could send the pair down towards the 20-day SMA at 1.3497, especially if market anticipation reverses amid surprise economic indicators or adjustment of Fed and BoE signals. Traders need to watch these levels for possible retracement or short-term corrections.

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Currencies GBP/USD

Pound Sterling Comes Under Pressure as UK’s GDP Slows and Factory Production Falls

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  • September 12, 2025
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Pound Sterling fell against the major currencies on Friday after the release of the slowdown in UK GDP and low factory numbers for July. Economic growth was flat after a 0.4% increase in June, while manufacturing and industrial production fell 1.3% and 0.9% month-on-month, respectively. The soft economic indicators have raised hopes of additional Bank of England rate reductions later this year, with markets poised to watch closely for the forthcoming monetary policy decision. GBP/USD meanwhile reversed around 1.3550 as dovish Fed talk circulated, with US weekly jobless claims up and inflation figures stable, with investors on their guard and the pound trading sideways. KEY LOOKOUTS •  Market players will keep a close eye on the BoE’s next interest rate decision, which is likely to hold rates steady at 4%, for clues on possible future reductions. •   The three-month job market data up to July, to be released on Tuesday, may shape Sterling’s short-term outlook. •  Major support is around 1.3140, while resistance remains around 1.3800, with the pair trading within an ascending triangle pattern. •  Weekly unemployment claims, revised Nonfarm Payrolls, and Consumer Sentiment statistics may affect GBP/USD via speculation of Fed rate changes. Pound Sterling experienced selling pressure following the stagnation of UK GDP growth in July, and the decline in manufacturing and industrial production strengthened fears about the nation’s economic performance. Weak data has fueled expectations of potential future Bank of England rate cuts, and traders also monitor coming employment data for more guidance. Against the US Dollar, GBP/USD retraced close to 1.3550, trading in a sideways trend within an ascending triangle formation, as investors balance dovish Fed hopes in light of increasing US jobless claims and stable inflation. Overall, market sentiment is conservative, as both UK and US economic directions are uncertain. Pound Sterling fell after UK GDP flat-lined and factory production declined, increasing expectations for possible BoE rate cuts. GBP/USD retraced close to 1.3550 and traded sideways amidst dovish Fed rumors and confused US economic data. • UK GDP growth was flat in July following a 0.4% increase in June. • Manufacturing output fell 1.3% MoM, with industrial production dropping 0.9% MoM. • Poor UK economic data has fueled market rumors of additional Bank of England rate cuts. • GBP/USD retreated close to 1.3550 during European trading after the GDP release. • The currency pair trades within an ascending triangle and support is around 1.3140, while resistance is close to 1.3800. • US weekly jobless claims increased to 263K, the highest in almost four years, and stoked dovish Fed hopes. • Investors are watching ahead UK labor market data and US consumer sentiment for new market signals. The Pound Sterling came under sell pressure after the UK economy stagnated in July. GDP growth was stagnant after a weak 0.4% increase in June, while industrial and manufacturing production both fell, indicating weakening economic activity. These weak numbers have increased the likelihood that the Bank of England will discuss further interest rate reductions later in the year to cushion growth. Market players are also closely monitoring future employment releases for further information on the strength of the UK job market. GBP/USD DAILY CHART PRICE SOURCE: TradingView At the same time, global events are driving the performance of the pound relative to the US Dollar. Higher US weekly jobless claims and changes to Nonfarm Payrolls have strengthened expectations of a dovish Federal Reserve, while inflationary pressures remain influencing consumer prices. Further US economic releases, such as consumer sentiment, will be watched by investors and can influence expectations around monetary policy. In general, uncertainty in the UK and US economies is holding traders back and the Pound down. TECHNICAL ANALYSIS GBP/USD is currently trading in an ascending triangle pattern, which indicates investor indecision. The horizontal resistance point is around 1.3585, while the rising support line comes from the August 1 low of around 1.3140. The pair is oscillating around its 20-day Exponential Moving Average (EMA) of 1.3487, suggesting a lateral trend. Moreover, the 14-day Relative Strength Index (RSI) is still oscillating between 40 and 60, supporting the absence of clear momentum in either direction. Critical levels to monitor are support at 1.3140 and resistance around 1.3800, which will determine the next major move. FORECAST In the shorter term, GBP/USD is likely to continue in a trading range as the market digests the newest UK GDP and manufacturing data. If support around 1.3140 can hold up, then the pound can stabilize and slowly try to probe resistance at 1.3585. Any upside surprises in future UK employment reports or indications of easing US economic momentum would help the pair move higher. To the negative, additional economic softness in the UK, e.g., weak job data or ongoing declines in industrial production, might place further pressure on the Pound. Or an unexpectedly stronger US economic report or Federal Reserve hawkish comments might weaken GBP/USD, potentially testing the August 1 low around 1.3140. The important triggers should be watched closely by traders to determine the next direction.

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Currencies GBP/USD

Pound Sterling Remains Steady as BoE Sends Mixed Signals on Uncertain Path for Interest Rate Cuts

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  • September 4, 2025
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Pound Sterling traded generally stable on Thursday as Bank of England (BoE) policymakers sent mixed signals on the future direction of interest rates during testimony to the Treasury Committee. Governor Andrew Bailey pointed to high uncertainty over the pace of rate cuts, citing inflation and employment risks, while other policymakers were hawkish, warning against premature easing. Conversely, MPC member Alan Taylor preferred faster cuts, highlighting internal divisions within the BoE. Meanwhile, GBP/USD edged lower toward 1.3435 as investors turned attention to key US economic releases, including ADP Employment and ISM Services PMI, with markets also considering increased expectations of a September Federal Reserve rate cut. KEY LOOKOUTS • Governor Bailey pointed to uncertainty on the pace of rate cuts, while some policymakers emphasized inflation risks and others urged faster easing. • The pair trades around 1.3435, below the 20-day EMA, with a near-term bearish bias. • Markets look to ADP Employment and ISM Services PMI, key releases for Fed policy expectations. • Weaker US job data has driven the probability of a September rate cut to almost 98%, maintaining USD volatility high. The Pound Sterling is trading steadily against major counterparts as mixed signals from Bank of England (BoE) policymakers leave investors in the dark about the direction of interest rates. Governor Andrew Bailey pointed to doubts over how rapidly cuts can be delivered, while some officials cautioned against premature easing due to ongoing inflation risks. Conversely, others called for faster reductions to support growth, highlighting a divided policy outlook. Against this backdrop, GBP/USD edged lower toward 1.3435 as traders turned attention to key US economic releases, with Fed rate cut expectations already fueling increased volatility in the Dollar. Pound Sterling remains steady as BoE policymakers send mixed signals on the pace of future rate cuts. GBP/USD trades around 1.3435, with investors looking to key US ADP Employment and ISM Services PMI data to assess the Fed’s policy outlook. • The Pound Sterling trades generally stable following BoE policymakers’ comments before the Treasury Committee. • BoE Governor Andrew Bailey indicated doubt over the speed of future rate reductions, citing inflation and employment market risks. • Deputy Governor Clare Lombardelli and policymaker Megan Greene were hawkish, cautioning against premature easing. • MPC member Alan Taylor preferred more rapid cuts, describing recent inflation rises as temporary and advocating more aggressive rate reductions. • GBP/USD fell towards 1.3435, below the 20-day EMA, suggesting short-term bearish momentum. • Markets now assign a 97.6% probability of a Fed rate cut in September after weak US job openings data. • Investors look to US ADP Employment and ISM Services PMI data, due to guide near-term USD direction. The Pound Sterling held firm on Thursday as the Bank of England (BoE) officials provided a combination of cautious and hawkish signals on the interest rate outlook. Governor Andrew Bailey emphasized uncertainty over how rapidly the central bank could cut rates, citing concerns over both inflation pressures and employment market risks. Meanwhile, Deputy Governor Clare Lombardelli and policymaker Megan Greene were firm on inflation, cautioning that easing monetary policy too early could jeopardize the BoE’s 2% inflation target. Their comments were in line with the central bank’s cautious approach to balancing growth with price stability. GBP/USD DAILY CHART PRICE SOURCE: TradingView Conversely, Monetary Policy Committee member Alan Taylor advocated a more rapid pace of rate reductions, seeing recent inflation rises as temporary and calling for more aggressive action to support economic activity. This split within the BoE highlights the nuance of the current policy debate, with officials divided between tackling inflationary risks and avoiding stress on the labor market. Meanwhile, investor focus has turned to forthcoming US economic releases, in particular the ADP Employment and ISM Services PMI data, as these will shape expectations for the Federal Reserve’s policy trajectory in the weeks ahead. TECHNICAL ANALYSIS GBP/USD pair is indicating near-term weakness as it trades below the 20-day Exponential Moving Average (EMA) at 1.3463, indicating bearish momentum. The 14-day Relative Strength Index (RSI) is in the neutral 40–60 zone, reflecting a lack of strong directional bias but leaning slightly to the downside. The key support is near the August 1 low of 1.3140, which, if breached, could pave the way for further losses. On the upside, the August 14 high around 1.3600 is a major resistance level, and a sustained break above it would be needed to indicate a bullish reversal. FORECAST If US data, especially ADP Employment and ISM Services PMI, fails to meet expectations, the US Dollar may weaken, supporting GBP/USD. A sustained rally above the 20-day EMA at 1.3463 may pave the way towards 1.3600, the August 14 high, which is a key resistance level. Positive surprises from UK economic data or a more dovish bias from the Federal Reserve could also support Sterling, keeping buyers engaged in the near term. Conversely, better-than-expected US economic data may support the Dollar, putting further pressure on GBP/USD. A break below near-term support levels may drive the pair towards the August 1 low of 1.3140, which is a critical downside target. Moreover, ongoing uncertainty regarding the BoE’s monetary policy direction and ongoing inflation concerns in the UK may cap Sterling’s resilience, raising the risk of deeper losses if global risk sentiment is in favor of the Greenback.

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Currencies GBP/USD

GBP/USD Under Pressure Below 1.2200 After Soft UK Inflation Data

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  • January 16, 2025
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GBP/USD is under pressure, trading around 1.2220 after two days of gains, following softer-than-expected inflation data from the UK. The Consumer Price Index (CPI) for December showed a smaller-than-anticipated increase, which could provide the Bank of England with room to cut interest rates in February. As such, the Pound faces headwinds, especially against a weakening USD, despite lower-than-expected US Producer Price Index (PPI) figures. Technically, GBP/USD remains above the 23.6% Fibonacci retracement level but needs a sustained break above the 1.2240 resistance to regain bullish momentum. However, a drop below 1.2200 may trigger further downside towards 1.2150 or even 1.2100, especially if US inflation data later in the week influences market expectations for Federal Reserve policy. KEY LOOKOUTS • Readings could pave the way for potential interest rate cuts by the Bank of England, weighing on the Pound’s strength against the USD. • To maintain the momentum, GBP/USD needs to break above 1.2240 resistance and then target 1.2280 and 1.2300. • US Consumer Price Index is going to play a significant role in determining the Federal Reserve rate outlook, thus affecting USD dynamics and GBP/USD price action. • Optimism over US trade policies and ease concerns over the Fed rate cuts could cap the further USD weakness and give some support to the GBP/USD pair. GBP/USD major key watch items would be UK inflation data that will impact the decision of interest rate cuts from the Bank of England, putting even more pressure on the Pound. Technically, the pair faces resistance around 1.2240, and a break above this level could take it towards 1.2300. Additionally, the US Consumer Price Index report that is due out soon will be crucial in forming expectations for Federal Reserve policy, which may influence the strength of the USD. Finally, the overall market sentiment about US trade policies and economic conditions will also determine the short-term direction for GBP/USD. The immediate direction of the GBP/USD would depend on the UK inflation report, possible rate cuts by the BoE, technical resistance around 1.2240, and US CPI. • Softer-than-expected CPI data in December might provide the BoE with space to cut interest rates, hurting the Pound. • The pair is resisting at around 1.2240; a sustained break above this point could take the pair towards 1.2300 and other higher Fibonacci levels. • US PPI data was weak, which contributed to a softer USD in the short term. • The US Consumer Price Index (CPI) release will be important in shaping expectations for the Federal Reserve’s interest rate policy. • Optimism over US economic conditions and easing trade concerns could provide support to the USD, limiting further Pound gains. • The 23.6% Fibonacci retracement level at 1.2200 is critical, and there is a potential for further upward movement if GBP/USD can break above 1.2240. • The daily RSI for GBP/USD has started to show signs of being oversold, which might suggest a bounce near key support levels like 1.2150-1.2100. GBP/USD is under pressure as softer-than-expected UK inflation data increase the chances of possible interest rate cuts by the Bank of England. Consumer Price Index for December came in at 2.5% below expectations, and that has led to concerns whether the UK economy may indeed be easing inflationary pressures, especially concerning stagflation risks. The pair is technically holding above the 23.6% Fibonacci retracement level at 1.2200; however, much upside remains dependent upon a clear break above the resistance zone at 1.2240. The US Consumer Price Index for April will also determine the way ahead for Federal Reserve monetary policy and USD movements in the coming weeks. A less-than-expected print on CPI would further keep USD pressure low, but a better print would likely increase the chances of a strengthening dollar. Improved US economic conditions as trade tension issues ease should add to support the USD as well. Traders will be focusing closely on both US and UK data flows in the next days, which will probably decide the major market moves for the GBP/USD in the near future. TECHNICAL ANALYSIS From a technical view point, GBP/USD is holding above the short-term support at the 23.6% Fibonacci retracement level at 1.2200. A break above the 100-hour Exponential Moving Average (EMA) at 1.2240 can sustain higher, where 1.2280 represents a possible area on the 38.2% Fibonacci level. Further strength might take the price to the 1.2300 region and the 1.2315 resistance area. If the price drops below 1.2200, some of the significant support levels include 1.2150-1.2140 and then 1.2100. A clear violation below 1.2100 would most probably establish a continuation of the broader trend, leaving it open to a further drop. GBP/USD Daily Price Chart Sources: TradingView, Prepared By ELLYANA. FORECAST If GBP/USD breaks above the immediate resistance at 1.2240 (100-hour EMA), then it could make its way toward the next key resistance at 1.2280, which also coincides with the 38.2% Fibonacci retracement level. Further up, the pair may push toward 1.2300, followed by the 1.2315 resistance zone. A strong break above 1.2315 may signal a potential rally toward the 50% Fibonacci level at 1.2335, further extending gains. On the negative side, if GBP/USD cannot sustain a rally above 1.2200, then a move below that support may find the next strong support in the region of 1.2150-1.2140. A breach of that zone may see 1.2100 in the near future. Once 1.2100 falls, then recent lows might be seen, thus continuing the major downtrend and bringing possible targets in the vicinity of 1.2050 or even 1.2000.

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