🔍 Fundamental Overview
GBP/USD begins the final trading week of 2025 near 1.35, supported by persistent USD weakness, improving risk sentiment, and ongoing bullish correction patterns. However, BoE policy expectations and cooling UK macro data limit upside conviction.
🇬🇧 United Kingdom
• BoE Policy: The Bank of England kept interest rates unchanged at 4.0%, providing support to GBP but signaling caution as inflation and growth soften.
• Economic Tone: UK GDP contracted 0.1% in October, following the same decline in September—reflecting stagnation pressure. Still, Sterling remained firm due to risk appetite and USD weakness.
• Market Reaction: Despite weakening retail sales and rising unemployment, GBP/USD continues to benefit from expectations that the BoE may ease gradually in 2026, but not aggressively.
🇺🇸 United States
• Fed Policy: Following the December rate cut, markets continue pricing multiple cuts in 2026, even though the Fed’s dot plot projects only one. This dovish expectation weakens the USD broadly.
• Labor Market: US jobless claims rose to 236K, the highest in three months—fueling more USD downside.
• Risk Sentiment: Equity strength and stable volatility support GBP against the USD heading into year end.

📊 Technical Analysis
Support Levels
• 1.3395 – 1.3400 — Key structural support (break below signals deeper correction)
• 1.3315 — Downside target if correction accelerates
• 1.3220 – 1.3200 — Critical lower support from broader trend context
Resistance Levels
• 1.3515 — Immediate weekly resistance; test expected early in week
• 1.3645 — Breakout trigger; invalidates bearish bias if price closes above
• 1.3765 — Extended bullish continuation target if strong rally develops
Indicators
• RSI: Testing trendline resistance, signaling potential slowdown before next leg.
• Moving Averages: Bullish structure as price trades above signal line cluster, confirming correction phase.
• Market Structure: Upward correction inside a broader descending channel; rejection at upper boundary may trigger pullback.

📈 Trading Scenarios
✅ Bullish Setup
• Entry: Break and close above 1.3515
• Targets:
➤ 1.3645 (primary breakout target)
➤ 1.3765 (strong continuation level)
• Stop Loss: Below 1.3395
• Catalysts:
o Continued USD weakness
o Strong risk on environment
o Hawkish leaning BoE commentary
❌ Bearish Setup
• Entry: Sustained close below 1.3395
• Targets:
➤ 1.3315
➤ 1.3200
• Stop Loss: Above 1.3515
• Catalysts:
o Strong US labor or inflation data
o Dovish BoE signals
o Rejection from descending channel resistance