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The GBP/USD Forecast sees bullish momentum as the British Pound gains strength against the US Dollar. With the Bank of England’s hawkish stance elevating the Pound and speculation surrounding the Federal Reserve’s rate hike intentions pressuring the Dollar, the currency pair targets 1.2700 and beyond.
The GBP/USD pair continues its upward momentum, comfortably surpassing the 1.2600 level, marking its highest since last August at 1.2644. The recent surge is credited to the Bank of England’s hawkish stance, which has injected strength into the British Pound.
BoE’s Bailey Addresses GBP/USD Forecast On Inflation Challenges
Governor Andrew Bailey’s remarks on inflation targeting the 2% mark highlighted the challenges ahead. Despite acknowledging the strain higher rates place on households, Bailey hinted that rate cuts aren’t currently under consideration. UK inflation, measured by CPI, stood at 4.6% YoY in October, well above the central bank’s comfort zone. Policymakers anticipate a return to the 2% mark by the end of 2025.
Conversely, the US Dollar faces downward pressure amid speculation that the Federal Reserve might halt rate hikes. This uncertainty surrounding the Fed’s monetary policy direction has contributed to the Pound’s strength against the Dollar.
Also Read: US Dollar Declines to November Low, Japanese Yen Strengthens
Technical Analysis and GBP/USD Forecast
The GBP/USD’s technical analysis suggests a sustained bullish trend, supported by its position above the crucial 1.2600 mark. The daily chart indicates a healthy distance from its moving averages, signaling robust buying interest. However, market forecast caution is warranted as technical indicators show signs of waning bullish momentum, albeit without indicating an imminent downturn.
Support Levels: 1.2605, 1.2570, 1.2525
Resistance Levels: 1.2645, 1.2690, 1.2730
Light Economic Schedule for the UK
The UK’s economic calendar for the week remains relatively light, with the recent October BRC Shop Price Index displaying a slight improvement at 4.3% YoY.
GBP/USD remains positioned for further gains, hovering near its multi-month high. On the daily chart, the 20 Simple Moving Average (SMA) continues its upward trajectory, supporting the pair’s bullish momentum.
In the short term, the 4-hour chart suggests a neutral-to-bullish outlook, with GBP/USD maintaining a position above its moving averages. Technical indicators lack clear direction but remain within positive levels, potentially signaling a continuation towards higher levels upon breaching 1.2645.
