(
MENAFN- Daily Forex)
- Recent attempts by the GBP/USD currency pair to rebound have not moved far from the vicinity of the 1.2500 support level, which we have often noted as the most important for maintaining bearish dominance over the GBP/USD trend.
- Technically, breaking this support would drive the pair towards its seven-month low.
- According to the forex market, the GBP has declined by 1.5% in 2024 so far, after maintaining its position against the US dollar for most of 2024.
GBP/USD Forecast for 2025
In this regard, Scotiabank expects a strong US economy and high yields to push the US dollar to its highest levels in two years as the EUR/USD slides to parity. In this environment, the GBP/USD is expected to decline to 1.22 support by the end of 2025. Scotiabank also expects the Trump administration to enact tax cuts and regulatory rollbacks that will support the US economy. The bank also sees the potential for another positive wealth effect from the strength of US equities, which would also help support consumer spending and investment.
In this context, the bank has revised its 2025 GDP growth forecast to 2.1% from 1.8%. With concerns about inflation, it also expects a significant impact on the US Federal Reserve's policy. It now expects the Fed to be able to cut US interest rates only twice in 2025 to 4.00%, which will keep rates higher than the Eurozone. Moreover, Scotiabank expects the strength of equities and high yields to continue to support the US dollar over the year. However, it expects a reversal in 2026 as the US economy slows, with the GBP/USD pair recovering to 1.30 by the end of 2026.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Trading Tips:
The GBP/USD pair may remain in a narrow move with a downward bias until the markets' vision of the future of Trump's policies becomes clearBank of England policies affect the pound
One of the factors that pressured the performance of the GBP was the Bank of England's slow pace of interest rate cuts during 2024, which reduced borrowing costs by only half a percentage point. This has supported much of the strength of the GBP. However, changing expectations for further cuts in UK interest rates in the future have put pressure on the GBP in recent weeks. In general, the markets expect interest rate cuts of 51.5 basis points in 2025 by the Bank of England, compared to 46 basis points in the cuts that were priced in before the latest monetary policy meeting of the year, when it kept interest rates unchanged but was more divided on the decision than markets expected Analysis for the GBP/USD pair today:
According to the performance on the daily chart above, the overall trend of the GBP/USD remains downward. Meanwhile, the 1.2500 support level still solidifies the bears' dominance and thus the readiness for a stronger downward move that could take the pair towards the following more important support levels of 1.2445, 1.2380, and 1.2300. technically, that in turn could move technical indicators towards oversold levels, led by the Relative Strength Index and the Stochastic oscillator. Furthermore, we still prefer selling the GBP/USD from every upward level without taking risks and activating take-profit and stop-loss levels to ensure the safety of the investment account from any sudden price reversals.
EURUSD Chart by TradingView
Ready to trade our daily GBP/USD Forex analysis ? We've made this UK forex brokers list for you to check out.
MENAFN30122024000131011023ID1109042555
Comments
No comment