GBP/USD Bounces Off Support Below 1.25 but UK GDP Remains Disappointing

Last week GBP/USD slipped below 1.25 again after the FED and BOE meetings, however it bounced off the November low, climbing above 1.26.

Nonetheless, the pressure remains to the downside for this forex pair, as the UK economy remains pretty weak, which was confirmed by today’s final Q3 GDP numbers. The GBP started the week strong, buoyed by a series of encouraging UK data releases. However, the currency lost about 2 cents following the Federal Reserve’s aggressive rate cut and further declined below 1.25 after the Bank of England (BOE) adopted a dovish stance.

The UK November CPI report highlighted a rise in consumer inflation, complementing earlier improvements in services PMI and labor market data. Nevertheless, the Q3 GDP report, while slightly outdated, continues to show signs of sustained economic decline. Despite these brief surges, upward attempts in GBP/USD appear to provide selling opportunities, as buyers repeatedly fail to sustain momentum. Moving averages, which have turned into resistance levels, reflect this bearish sentiment.

GBP/USD Chart Daily – Mas Continue to Rejects Bounces

Notably, the 20 SMA (gray) on the daily chart rejected the price at 1.2660s on Thursday, marking the first potential level for a sell trading signal in GBP/USD. The BOE’s recent meeting reinforced this bearish outlook, with a dovish tone prevailing despite the decision to hold interest rates steady. The vote split shifted unexpectedly, with 6 members favoring and three for a cut no change versus the anticipated 8-1 split. Dhingra, Ramsden, and Taylor contributed to the dovish tilt, voting for a 25-basis-point rate cut, signaling growing concerns about the UK’s economic trajectory.

UK Q3 GDP Report Final

GBP/USD Live Chart

GBP/USD

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.