GBP/USD Forecast and News
GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
Latest Pound Sterling News
GBP/USD Technical Overview
The GBP/USD pair finds some support near the 1.3600 mark, representing the 50% Fibonacci retracement level of the upswing from the January swing low, which should now act as a key pivotal point for traders. Meanwhile, the recent breakdown below the 100-hour Simple Moving Average (SMA) favors bears.
The Moving Average Convergence Divergence (MACD) remains below the zero line with the MACD line under the Signal line and a contracting histogram, suggesting weak bearish momentum. The Relative Strength Index (RSI) sits near 32 (oversold threshold), hinting that downside pressure is stretched.
Meanwhile, the 61.8% Fibo. retracement at 1.3548 underpins the downside, and a break would warn of a deeper deterioration. Absent such a breach, stabilization above mid-range support could allow an oversold bounce, though the declining 100-period SMA would keep recovery attempts fragile.
Fundamental Overview
The GBP/USD pair attracts follow-through sellers for the second straight day on Thursday and retreats further from its highest level since September 2021, around the 1.3870 region, touched last week. The downward trajectory is sponsored by a firmer US Dollar (USD) and drags spot prices to the 1.3600 neighborhood or a nearly two-week low during the early European session as traders await the Bank of England (BoE) policy update.
The UK central bank is widely expected to leave the benchmark interest rates unchanged at 3.75% amid a rise in inflation, which remained above the BoE's 2% target in December. Traders, however, are still pricing in the possibility that the BoE will lower borrowing costs in 2026 amid signs of a weakening labor market. In fact, the UK Unemployment rate remained at a four-year high of 5.1% in the three months to November, and the number of employed people fell by 43,000 in December. Adding to this, slowing wage growth strengthens the case for further BoE easing. Hence, the focus will remain glued to the MPC vote split and the post-meeting press conference, where comments from BoE Governor Andrew Bailey will influence the British Pound (GBP) and provide some meaningful impetus to the GBP/USD pair.
Heading into the key central bank event risk, the GBP bulls opt to remain on the sidelines amid an extension of the recent USD recovery from a four-year low. US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve (Fed) chair fueled speculations that the central bank will be less dovish than expected. Furthermore, heightened market volatility and Fed Governor Lisa Cook's hawkish comments, saying that risks are skewed toward higher inflation, lift the safe-haven Greenback to a nearly two-week high, which continues to exert some downward pressure on the GBP/USD pair. Any meaningful USD upside, however, seems elusive on the back of expectations of two more interest rate cuts by the US central bank in 2026. The bets were reaffirmed by Wednesday's dismal labor market report.
In fact, the Automatic Data Processing (ADP) Research Institute reported that private-sector employers added 22K new jobs in January compared to the previous month's downwardly revised reading of 37K and 48K consensus estimates. Adding to this, Trump said that he would have passed on Kevin Warsh's nomination if he had expressed a desire to hike rates and that there was not much doubt that the US central bank would lower interest rates. This, in turn, could cap the USD gains and act as a tailwind for the GBP/USD pair. Traders on Thursday will further take cues from the US economic docket – featuring JOLTS Job Openings and Weekly Initial Jobless Claims. Nevertheless, the mixed fundamental backdrop warrants some caution before placing aggressive bets and positioning for the next leg of a directional move.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
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GBP/USD YEARLY FORECAST
How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2025 GBP/USD forecast!
GBP/USD 2025 FORECAST
In the GBP/USD 2025 Forecast, FXStreet Senior Analyst Dhwani Mehta indicates divergence between United States Federal Reserve (Fed) and Bank of England (BoE) monetary policy expectations and Donald Trump’s announced protectionist measures may strengthen the US Dollar (USD).
The Fed is signaling a more cautious approach to monetary policy as it navigates strong economic growth and rising inflationary pressures under the new Trump administration.
In contrast, the Bank of England has adopted a more dovish stance amid a fragile UK economy. Market expectations are pricing in up to three quarter-point cuts in 2025.
From a technical point of view, the GBP/USD pair faces further downside after breaking below the 18-month rising wedge support at 1.2682, with the RSI in negative territory. Key support levels are 1.2037, 1.1802, and 1.1500, potentially leading to the 1.1000 mark. Recovery attempts face resistance at 1.2900, with bullish momentum only confirmed above 1.3490.
MOST INFLUENTIAL FACTORS IN 2025 FOR GBP/USD
The year will be politically marked by Trump’s return to the White House. A Republican government is seen as positive for financial markets, but Trump’s pledge to cut taxes and impose tariffs on foreign goods and services may introduce uncertainty to both the political and economic landscape.
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
Founded in 1694, the Bank of England (BoE) is the central bank of the United Kingdom (UK). Known as ‘The old lady of Threadneedle Street’, the bank’s mission is "to promote the good of the people of the United Kingdom by maintaining monetary and financial stability".
The Bank of England is responsible for maintaining the UK’s economic stability. It operates monetary policy by adjusting the Bank Rate and, in certain circumstances, supplements this with measures such as quantitative easing.
The Bank of England decides monetary policy for the United Kingdom. Its primary goal is to achieve a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
The official website, on X and YouTube
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website, on X and Facebook
Andrew Bailey
Andrew Bailey has been the Governor of the BoE since March 2020 and his appointment ends on March 2028. Previously, he served in the BoJ as its Chief Cashier, Deputy Governor for Prudential Regulation and Chief Executive of the Financial Conduct Authority.
Bailey on BoE's profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
FED NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States.
As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
Related pairs
EUR/USD
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).