GBP/USD Price Forecast: Pound Holds 1.33–1.34 Range Into High-Stakes Central Bank Week

GBP/USD Price: Dovish Fed, BoE Cut Risk And A Heavy 1.34 Ceiling

GBP/USD Weekly Performance: Dollar On The Back Foot, Pound Still Lagging Euro

GBP/USD started the week near 1.3325 and finished around 1.3373, after trading in a relatively tight 1.3288–1.3434 band. That’s roughly a +0.36% weekly gain – a clean but not explosive move higher. At the same time EUR/USD opened near 1.1640, pushed up toward 1.1762, and closed around 1.1743, a stronger +0.88% rise. The cross GBP/EUR moved the other way: from about 1.1448 down to 1.1388, a -0.52% slide, showing the euro outpacing sterling even as both climbed against the USD.

Under the surface, the big structural driver is a softer dollar: the broad USD index is ending the year roughly 9% lower, and that shift in the dollar leg is exactly what lifted GBP/USD from the 1.3025 region seen on 21 November up to this week’s peak near 1.3438–1.3423.

GBP/USD – Fed Cut, Powell Exit And The U.S. Side Of The Trade

On the USD side of GBP/USD, the immediate trigger was the Fed’s 25 bps rate cut. The cut itself was fully expected, but the market reaction was not: instead of “sell the news” dollar strength, institutions treated it as confirmation that the Fed is moving deeper into an easing cycle.

The nuance is forward-looking. Powell is out by May 2026. Markets are already discounting the probability that his successor under the current U.S. administration adopts a more openly dovish stance than the current “cautious cut” posture. That shift matters because the entire 2020–2021 risk rally – including the earlier big moves in GBP/USD – was built on ultra-cheap dollar funding.

Short term, weaker U.S. data (jobless claims, softer macro prints) combined with the cut to push GBP/USD up toward 1.34 instead of the clean downside many traders positioned for. The result: an unwinding of defensive dollar longs and a grind higher in the pair, even though no one seriously claims the UK macro story looks stronger than the U.S. story right now.

GBP/USD – UK Growth Slippage And A BoE That’s About To Cut

The GBP leg doesn’t justify complacency. UK data is weak: GDP contracted 0.1% m/m in October, and output over the August–October three-month window also printed -0.1%. That is not a backdrop that supports aggressive BoE hawkishness.

Markets now assign very high probability to a 25 bps BoE cut on 18 December, taking Bank Rate down to roughly 3.75%. On top of that, the upcoming CPI print is expected around 3.5% y/y, well off the earlier highs and giving the BoE more political room to move.

This is why GBP/EUR slid from ~1.1448 to ~1.1388 even as GBP/USD climbed. The pound is riding the weaker-dollar wave, not leading it. When the cut is delivered, the focus flips instantly to guidance: if the BoE signals a sequence of moves into early 2026, rate-differential pressure can easily cap GBP/USD below the upper 1.34–1.35 zone.

EUR Strength As A Headwind: What It Implies For GBP/USD

The EUR side of the story matters because GBP tends to struggle when the euro is the preferred anti-dollar. The ECB is holding its deposit rate near 2.0% and repeatedly calling policy “in a good place”. Growth in the euro area, while mediocre, has been more resilient than many expected earlier this year.

The result: EUR/USD gains of almost +13% year-to-date and a stronger trade-weighted euro feed into a narrative where the euro can keep absorbing dollar weakness while the pound trades more like a follower. That’s exactly what last week’s price action showed – EUR/USD up nearly a full percentage point, GBP/USD up about a third of that, and GBP/EUR pushed lower.

For GBP/USD, that means any sustained break above 1.34–1.3470 needs either a fresh leg of broad dollar selling or a BoE stance that is less dovish than the market has priced. Right now, neither is guaranteed.

GBP/USD Price Structure: From 1.0351 Capitulation Low To The 1.34 Wall

Technically, GBP/USD is still in a bigger recovery structure off the 1.0351 extreme low from 2022. The rally into 1.3787 established the first major leg. The subsequent drop from 1.3787 down to 1.3008 has the shape of a three-wave corrective pattern, not the start of a new structural downtrend.

Key long-term levels on GBP/USD:

• First impulse high: 1.3787

• Correction low so far: 1.3008

• Critical Fibonacci marker: 38.2% retracement of 1.0351 → 1.3787 around 1.2474

As long as GBP/USD stays comfortably above ~1.2474, the market can treat everything since the 1.3008 low as part of an ongoing broader up-leg aiming back at 1.3787 and potentially toward structural resistance around 1.4248 (the 2021 high area).

The latest push from 1.3008 to 1.3438 fits into that bullish structure. The rejection from 1.3438 and the repeated failure around the 1.3400–1.3470 band simply mark this area as the next serious resistance shelf to clear before the market can seriously talk about a run at 1.3787 again.

Near-Term GBP/USD Levels: 1.3438–1.3470 Resistance Vs. 1.3286–1.3200 Support

The shorter-term map for GBP/USD is clean and very tradable:

• Immediate resistance:

  • Intraday/weekly top at 1.3438

  • Overhead trigger at 1.3470 – a decisive break here opens the door toward 1.37–1.38

• First support band:

  • Short-term structural level around 1.3286–1.3271

  • Tactical range from one forecast: 1.33085–1.34590, with the lower edge acting as a pivot

• Deeper support:

  • Psychological 1.3200

  • Below there, the 1.3000 region – the late-November pivot low and line in the sand for the latest up-leg

The multi-source view lines up: one desk is using 1.32 as the key floor for the current structure; another flags 1.3286 as the pivot that needs to hold for further upside; others call 1.34 a cap until there is a daily or weekly close through it.

So tactically, GBP/USD is boxed between ~1.33 support and ~1.34–1.3470 resistance. A sustained break in either direction will decide whether we extend the November–December rally or unwind it back toward 1.30.

Event Cluster: BoE And ECB On 18 December, U.S. Data And Holiday Liquidity

Into the week of 15–19 December, GBP/USD faces a dense macro calendar:

• UK: CPI (with 3.5% y/y expected) one day before the BoE; BoE on 18 December widely expected to cut 25 bps to 3.75%.

• Euro area: the ECB meets the same day, with policy widely expected to remain unchanged at 2.0%, but with markets highly sensitive to any hint that cuts might be back on the table for late 2026.

• U.S.: shutdown-delayed jobs, retail sales, and CPI prints packed into the same week, after the Fed’s cut. Stronger-than-expected inflation or labor numbers could quickly produce a “hawkish cut” re-pricing, lifting U.S. yields and supporting the USD.

Add the seasonal effect: this is the last full trading week before Christmas. Liquidity thins, bigger institutions square risk, and GBP/USD can overshoot levels like 1.34 or 1.32 on smaller flows. That increases the risk of whipsaws, not clean trends, around the precise time everyone is watching the same levels.

Positioning View On GBP/USD: Bias, Direction And Risk Markers

You want a clear call, not a hedge. Based strictly on these numbers and structures, the stance on GBP/USD is:

• Directional bias: moderately bullish / buy-on-dips, not chase-the-break.

  • The broader pattern from 1.0351 to 1.3787, with a correction only down to 1.3008 and a key long-term line at 1.2474, still supports a medium-term move higher.

  • The dollar leg remains structurally weaker after a 9% slide in the broad index this year and a confirmed 25 bps Fed cut.

• Short-term line in the sand:

  • As long as GBP/USD holds above roughly 1.3286–1.3300, the current rally from 1.3008 remains intact.

  • A clean break below 1.3200 starts to signal deeper mean reversion back toward 1.30.

• Upside triggers and targets:

  • First, a daily and ideally weekly close above 1.3400.

  • Second, a break through 1.3438–1.3470, targeting 1.37–1.38.

  • Medium term, a retest of 1.3787, and if the dollar leg keeps weakening into 2026, a possible grind toward 1.42–1.4250.

• Downside risk scenario:

  • A BoE cut that is framed as the start of a faster easing cycle, combined with stronger U.S. CPI or jobs, pulls GBP/USD back through 1.3286 and then 1.3200, putting 1.3000 back in play and stalling the broader bullish narrative.

Summing it up in trading terms: with GBP/USD closing around 1.3370, under a heavy 1.3400–1.3470 ceiling but still comfortably above 1.3286 and far from 1.3008, the pair is skewed toward the upside on a multi-week horizon. The setup favors bullish GBP/USD exposure on controlled dips toward the low 1.33–1.32 area, with clear invalidation below 1.30, rather than chasing late entries right into the central-bank event cluster at the 1.34 resistance band.

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