- The GBP/USD weekly forecast turns strongly bullish because the greenback loses traction amid geopolitics.
- The upbeat UK CPI, retail gross sales, and PMI knowledge offered ample help to the pair.
- Markets await the FOMC charge determination and press convention subsequent week.
GBPUSD ended final week with sterling fundamentals enhancing, however worth motion nonetheless leaned closely on USD headline danger and US charge expectations.
Within the UK, inflation re-accelerated as CPI rose 3.4% YoY in December (from 3.2%), which generally reduces the market’s confidence in speedy BoE easing and helped GBP on the day by lifting front-end UK yields. Exercise and demand knowledge additionally stunned positively: UK retail gross sales rose 0.4% MoM in December (versus expectations for a fall), including to indicators of a pickup and supporting sterling sentiment, even when the FX follow-through was at instances modest.
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The UK flash PMI set added to the constructive tone by signalling continued enlargement in private-sector exercise, reinforcing the concept the UK financial system will not be rolling over into the BoE’s subsequent selections.
On the US aspect, “good” knowledge didn’t translate right into a stronger greenback as a result of geopolitics dominated. The US financial system’s momentum was confirmed as Q3 2025 GDP was revised as much as a 4.4% annualized tempo, and enterprise surveys stayed expansionary with the S&P World flash PMIs exhibiting manufacturing at 51.9 and composite at 52.8 in January.
On the identical time, tensions between the US and Europe over Greenland added to volatility within the danger premium. Trump stated he would impose 10% tariffs on eight European nations underneath strain from Greenland. Later, he additionally stated {that a} “framework” had been talked about after assembly with NATO Secretary Common Mark Rutte. Denmark and Greenland each acknowledged that their sovereignty will not be negotiable. That blend made the markets jumpy and harm regular demand for the USD.
Within the subsequent week, there received’t be any massive UK releases, so the tape will lead. So, GBPUSD ought to largely commerce like a Fed-week USD cross, reacting to modifications in US yield expectations and any new geopolitical or tariff information.
If the Fed is hawkish, the USD might be stronger than the enhancing knowledge pulse of the GBP. Conversely, if the Fed stays balanced and yields fall, the GBP can maintain up higher than its friends, given final week’s hotter CPI and stronger exercise alerts.
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GBP/USD Weekly Technical Forecast: Bullish Above 1.3565
The GBPUSD day by day chart reveals a robust bullish candle piercing the 1.3565 resistance stage, adopted by the 1.3600 psychological mark. Nevertheless, the RSI approaching the overbought area signifies a possible pullback to the 1.3565 space earlier than an upside continuation.
The upside goal for the pair lies at 1.3700, forward of 1.3750. On the draw back, if the worth breaks and stays beneath the 1.3565 stage may collect additional promoting strain and drag in the direction of 1.3500.
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