GBP/USD has started 2025 on the front foot, reversing last year’s weakness and building momentum. Now, with the pair consolidating in a tight range near recent highs, traders are watching closely to see whether this sets the stage for another leg higher.
Fundamentals: US Weakness vs. BoE Caution
A key driver behind GBP/USD’s strength has been growing uncertainty around the US economy. The Atlanta Fed now projects a 2.4% contraction in Q1 GDP, while consumer confidence has seen its sharpest decline since August 2021. This has reinforced recession fears and put pressure on the US Dollar. Adding to the uncertainty, President Trump’s tariff policies have unsettled markets, with investors struggling to gauge the long-term impact on trade and growth.
Meanwhile, the Bank of England has taken a more measured approach. While the BoE cut rates by 25bps to 4.5%, policymakers have pushed back against the idea of a long and gradual easing cycle. With UK GDP projections remaining steady and inflation still above target, markets have taken this as a sign that the BoE won’t be in a hurry to cut rates further—helping to support the Pound.
Technical Analysis: A Classic Bullish Setup?
GBP/USD’s technical picture has shifted dramatically since the start of the year. After breaking above its descending trendline in late January, the pair has formed a steepening series of higher swing lows, creating an ascending trendline fan that signals increasing bullish momentum.
Last week’s push through the 200-day moving average for the first time since November marked another key milestone. Since then, the pair has entered a period of tight consolidation near the highs, which typically suggests strength rather than exhaustion.
Drilling down to the hourly chart, the boundaries of this consolidation phase become clear. Traders looking to align with the dominant trend have two key options: buying reversals at the lower end of the range or waiting for a decisive breakout before entering on momentum or a pullback.
GBP/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
GBP/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Fundamentals: US Weakness vs. BoE Caution
A key driver behind GBP/USD’s strength has been growing uncertainty around the US economy. The Atlanta Fed now projects a 2.4% contraction in Q1 GDP, while consumer confidence has seen its sharpest decline since August 2021. This has reinforced recession fears and put pressure on the US Dollar. Adding to the uncertainty, President Trump’s tariff policies have unsettled markets, with investors struggling to gauge the long-term impact on trade and growth.
Meanwhile, the Bank of England has taken a more measured approach. While the BoE cut rates by 25bps to 4.5%, policymakers have pushed back against the idea of a long and gradual easing cycle. With UK GDP projections remaining steady and inflation still above target, markets have taken this as a sign that the BoE won’t be in a hurry to cut rates further—helping to support the Pound.
Technical Analysis: A Classic Bullish Setup?
GBP/USD’s technical picture has shifted dramatically since the start of the year. After breaking above its descending trendline in late January, the pair has formed a steepening series of higher swing lows, creating an ascending trendline fan that signals increasing bullish momentum.
Last week’s push through the 200-day moving average for the first time since November marked another key milestone. Since then, the pair has entered a period of tight consolidation near the highs, which typically suggests strength rather than exhaustion.
Drilling down to the hourly chart, the boundaries of this consolidation phase become clear. Traders looking to align with the dominant trend have two key options: buying reversals at the lower end of the range or waiting for a decisive breakout before entering on momentum or a pullback.
GBP/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
GBP/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.