GBP/USD price outlook: Bearish sentiment holds as pair struggles below 1.2450
GBP/USD trades near 1.2445, bearish outlook stays intact below 1.2450
The GBP/USD pair is trading near 1.2445, posting modest gains in Thursday’s European session. Despite a slight dip in the U.S. dollar, the pair remains under selling pressure, with technical indicators reinforcing a bearish bias.
Investors are watching the upcoming US Gross Domestic Product (GDP) data, which could further influence market sentiment.
GBP/USD price analysis (Dec 2024 - Jan 2025) Source: TradingView.
GBP/USD faces resistance as technicals remain weak
The 100-day Exponential Moving Average (EMA) remains a key resistance level, keeping GBP/USD’s upside momentum in check. The 14-day Relative Strength Index (RSI) hovers around the midline, signaling potential consolidation rather than a clear trend reversal.
On the downside, 1.2400-1.2390 represents an important support zone. A break below this level could accelerate losses toward 1.2307, followed by 1.2160, marking a deeper correction. On the upside, the 1.2570 level stands as the next major resistance, while further strength could push the pair toward 1.2645 and 1.2778.
U.S. economic data remains key driver
The US Federal Reserve (Fed) left interest rates unchanged at 4.25%-4.5%, aligning with expectations. However, traders are closely watching US Q4 GDP data, set for release later on Thursday. Forecasts predict a slowdown in annualized GDP growth from 3.1% to 2.6%, which could impact the US dollar's trajectory.
If GDP and inflation data surprise to the upside, the US dollar may strengthen, reinforcing GBP/USD downside risks. Conversely, weaker economic data could ease pressure on the greenback, allowing GBP/USD to regain some ground.
Previously, we discussed how GBP/USD struggled to break above 1.2500, with Trump’s tariff concerns and Fed’s hawkish stance weighing on market sentiment. The latest price action confirms continued uncertainty, as traders assess US growth prospects and the Bank of England’s next move.
