empty
15.01.2025 12:51 PM
GBP/USD: Analysis and Forecast

This image is no longer relevant

The GBP/USD pair is struggling to capitalize on its modest recovery from the 1.2100 level, the lowest level since November 2023, reached earlier this week.

The intraday decline intensified after the release of weaker-than-expected UK consumer inflation data. However, subdued US dollar momentum is helping the pair hold its ground. According to the UK's Office for National Statistics (ONS), the Consumer Price Index (CPI) grew by 2.5% year-on-year in December, below expectations of a 2.7% increase from 2.6% in November. The core CPI, which excludes food and energy prices, rose by 3.2% during the reporting month, also falling short of the anticipated 3.4% growth and the previous 3.5% reading in November. These weaker inflation figures provide the Bank of England with room to consider lowering interest rates at its upcoming February monetary policy meeting. Additionally, concerns over the UK's fiscal situation and the risk of stagflation—combining high inflation with weak economic growth—are weighing on the British pound.

This image is no longer relevant

On the other hand, the US dollar reached a new weekly low following softer-than-expected US Producer Price Index (PPI) data released on Tuesday, complicating predictions for the Federal Reserve's next rate move. The PPI, which measures wholesale inflation, rose by 0.2% in December, while the core PPI remained unchanged for the reporting period. Optimism stemming from easing fears about US President-elect Donald Trump's potential trade tariffs also supports stock markets and undermines the dollar's safe-haven appeal, which in turn provides some support for the GBP/USD pair.

Nonetheless, expectations that the Federal Reserve may pause its rate-cutting cycle later this month have been a key driver of recent gains in US Treasury yields, limiting the US dollar's losses.

For better trading opportunities today, attention should turn to the upcoming release of the US Consumer Price Index (CPI), due early in the North American session. The CPI report, a critical indicator of US inflation, will influence Federal Reserve rate expectations and play a key role in shaping the short-term dynamics of the US dollar. This could provide fresh momentum for the GBP/USD pair. Therefore, it would be prudent to await confirmation of strong buying before initiating new long positions in GBP/USD.

From a technical perspective, GBP/USD has stabilized above the 1.2200 level. However, bulls need to see a sustained move beyond the 100-hour Simple Moving Average (SMA) and 100-hour Exponential Moving Average (EMA) before taking new long positions. If achieved, prices could accelerate northward toward the next psychological resistance level at 1.2300.

This image is no longer relevant

Conversely, a drop below the 1.2200 round level could continue to attract buyers in the 1.2150–1.2140 zone, given the slightly oversold Relative Strength Index (RSI) on the daily chart. However, selling pressure below this area would expose the more-than-one-year low reached on Monday. A convincing break below that level could serve as a new trigger for bearish momentum.

This image is no longer relevant

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Markets Begin Preparing for the Fed Monetary Policy Meeting (Potential Correction in Bitcoin and #SPX)

The inaugural week for Donald Trump has been marked by celebrations, but it has seen relatively few significant economic data releases. Consequently, market participants are focusing their attention

Pati Gani 08:21 2025-01-23 UTC+2

What to Pay Attention to on January 23? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic events are scheduled for Thursday—just one, to be precise. In the U.S., the weekly Unemployment Claims Report will be published. These reports rarely show significant deviations from

Paolo Greco 06:40 2025-01-23 UTC+2

Overview of the GBP/USD Pair on January 23: The Pound Sterling Creeps Up and Is Already Overbought

The GBP/USD currency pair continued its modest upward trend on Wednesday, despite the absence of specific or local reasons for this movement. Throughout the day, there were no macroeconomic reports

Paolo Greco 05:43 2025-01-23 UTC+2

Overview of the EUR/USD Pair on January 23: Promises Are Not Actions

The EUR/USD currency pair exhibited a restrained and calm trading pattern on Wednesday, as anticipated. Throughout the day, there were no significant movements, but the euro continued to rise steadily

Paolo Greco 05:43 2025-01-23 UTC+2

EUR/JPY: What Are the Growth Prospects for the EUR/JPY Pair Going Forward?

The EUR/JPY pair has been drawing buyers for the fourth consecutive day, continuing its recovery from the 159.65 level, where last week's monthly low was recorded. The intraday positive trend

Irina Yanina 11:36 2025-01-22 UTC+2

U.S. Stock Investors Welcome Trump's Policy Implementation (Gold and #NDX Prices May Continue Rising)

Trading on U.S. stock markets concluded on a positive note on the first working day under the new president. U.S. stock indexes experienced broad support, driven by increased demand

Pati Gani 09:37 2025-01-22 UTC+2

Overview of the GBP/USD Pair on January 22: The Pound's Brief Respite Comes to an End

The GBP/USD currency pair mirrored the decline of the EUR/USD on Tuesday. As noted in previous analyses, the dollar's drop on Monday lacked a fundamental basis, and a correction

Paolo Greco 04:42 2025-01-22 UTC+2

Overview of the EUR/USD Pair on January 22: We Lived Through Boring Years Without Trump

The EUR/USD currency pair began to recover much of the ground it lost on Monday during Tuesday's session, as expected. On Monday, the U.S. dollar experienced a sharp decline

Paolo Greco 04:42 2025-01-22 UTC+2

Recent gas market developments

The gas market saw an uptick following the announcement by US President Donald Trump of a state of emergency in the US oil and gas sector, along with his approval

Miroslaw Bawulski 11:41 2025-01-21 UTC+2

USD/JPY: Analysis and Forecast

The current position of the Japanese yen reflects a complex balance between the positive sentiment in equity markets and expectations of interest rate hikes by the Bank of Japan

Irina Yanina 11:37 2025-01-21 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.