It is consolidating around 1,2447 on Wednesday as merchants stop, waiting for key economic data launches in the United Kingdom at the end of this week.
Key factors that influence GBP/USD
Earlier this week, the British Libra faced pressure after the Policies Formulator of the Bank of England (BOE), Catherine Mann, changed to a more shovel posture. She declared that the weak domestic demand reduces the risks of inflation, marking a notable change from its previously aggressive position.
Mann now believes that consumer spending is slowing down, limiting the capacity of companies to increase prices and contribute to a faster decrease than expected in inflationary pressures.
The BOE expects inflation to increase to 3.7% at the end of 2025, compared to 2.5% in December 2024. Meanwhile, the GDP growth forecasts of the United Kingdom have been reduced to 0.75% by 2025, below the previous estimate of 1.5%.
Investors are now waiting for key macroeconomic data from the United Kingdom, which include:
December GDP estimation
- Preliminary Q4 2024 DAT of economic growth
- New Year's End Industrial Production Figures
Externally, the pound is also under pressure from a stronger US dollar. However, compared to other important currencies, GBP is still relatively stable.
GBP/USD technical analysis
In Figure H4, GBP/USD decreased to 1,2332, followed by a 1,2458 correction. After reaching this level, a new wave is expected towards 1,2279. A narrow consolidation range is likely to form around this level. If the price is broken below this range, the following objectives will be 1,2100 and 1,2020, indicating a continuous bearish trend. The MACD indicator admits this perspective, with its signal line placed below zero and pointing down, indicating a continuation of the bearish trend.
In Figure H1, GBP/USD completed a 1,2458 correction. The market is now expected to resume its movement down to 1,2279. The stochastic oscillator confirms this scenario, with its signal line above 80 and tending sharply by 20, which suggests an increase in bearish impulse.
Conclusion
GBP/USD is in a consolidation phase, with market participants who expect key economic data from the United Kingdom. The weakening of domestic demand and changing expectations with respect to the policy of the Bank of England (BOE) are weighing the pound, while the external pressure of a stronger USD increases its downward risks. Technically, more decreases are expected towards 1,2279, with the potential of deeper losses to 1,2100 and 1,2020 if the economic data disappoint. The market approach remains in the next macroeconomic launches of the United Kingdom, which will determine the next significant movement for GBP/USD.
By analytical department of Roboforex
Discharge of responsibility: Any forecast contained in this document is based on the author's particular opinion. This analysis may not be treated as commercial advice. Roboforex has no responsibility for commercial results based on commercial recommendations and reviews contained in this document.
