• The GBP/USD weekly forecast is strongly bullish as the dollar remains broadly weaker amid the Fed’s policy outlook.
• The easing of geopolitical worries and contraction of US GDP further weighed on the dollar.
• Next week’s employment data and US PMIs are essential to watch.

The British pound soared to its highest level since October 2021 against the US dollar, closing the week with a firm 2% gain above the 1.3700 mark. It was a seventh consecutive daily gain for the pair.

The rally was fueled by broader dollar weakness, easing geopolitical worries in the Middle East, and speculations around the Fed’s policy outlook.

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What Happened to GBP/USD Last Week?

The GBP/USD pair started the week with a bearish gap as investors fled to the safe-haven dollar in the wake of America’s attacks on three nuclear sites of Iran. The fear of further escalation after Iran’s warning weighed on the pound and other riskier assets. However, a swift ceasefire restored the peace, and the US dollar collapsed, lending room to the pound buyers.

The Fed’s policy outlook also contributed to the dollar’s further decline. Markets are now pricing in a 21% probability for a July cut and75% for the September cut, driven by dovish commentary from the Fed’s Bowman and Waller. However, Fed Chair Powell maintained a cautious tone due to Trump’s tariffs, which may reignite inflation. However, Trump’s criticism of the Fed, accompanied by a threat to replace the chairman as soon as September, created chaos, resulting in a further sell-off of the US dollar.

The US economic data also reinforced the dovish narrative. The Q1 GDP showed a contraction of 0.5%, but Durable Goods Orders surprised to the upside. On Friday, the Core PCE Index came in at 2.7% y/y, slightly above the estimate, providing a mild bid to the dollar but not enough to offset the broader bearish momentum.

On the UK side, the pound found relative stability due to improved economic sentiment and better business activity.

GBP/USD Key Events Next Week

There is no significant data from the UK next week. However, the markets will be closely watching the US labor market data and the Fed Chair’s speech. The ADP employment is expected to tick up to 105,000 from the previous 37,000 modestly. But the NFP print may continue its decline to 120k from the last 139k. Meanwhile, the unemployment rate may also slightly rise to 4.3%.

In addition to these, US Manufacturing/Services PMIs and JOLTs data are also due next week, which may provide impetus to the market.

GBP/USD Weekly Technical Forecast: Bulls Pause at 1.3700

The daily chart for the GBP/USD shows a strong bullish momentum, lying well above the key moving averages. However, the price could not hold onto the weekly highs of 1.3770 and corrected downwards. But the 1.3700 continues to support the upside. Meanwhile, the 20-day SMA is at 1.3555, which is almost 150 pips down from the current price. The overextended rally may see some consolidation and reversion to the 20-day SMA before a bullish continuation.

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The daily RSI is still below the overbought territory, which means further gains cannot be ruled out. The pair may test its weekly top at 1.3770 ahead of 1.3800. The ultimate bullish target lies at 1.4000.

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• GBP/USD consolidates weekly gains above 1.3700 on Friday.
• The technical outlook suggests that there is room for technical correction.
• Markets await May PCE inflation data from the US.

GBP/USD extended its weekly rally and reached its highest level since October 2021 at 1.3770 on Thursday. The pair stays in a consolidation phase in the European session on Friday and fluctuates slightly below 1.3750.

The broad-based selling pressure surrounding the US Dollar (USD) fuelled GBP/USD’s climb on Thursday. News suggesting that United States (US) President Donald Trump is planning to announce Federal Reserve (Fed) Chairman Jerome Powell’s replacement early to undermine him triggered a USD selloff. Additionally, mixed macroeconomic data releases from the US further weighed on the currency.

The US Bureau of Economic Analysis announced on Thursday that the Gross Domestic Product (GDP) contracted at an annual rate of 0.5%, compared to the 0.2% contraction reported in the previous estimate. Other data from the US showed that weekly Initial Jobless Claims declined to 236,000 from 245,000 in the previous week and Durable Goods Orders rose by 16.4% in May, surpassing the market expectation of 8.5%.

Later in the session, the Personal Consumption Expenditures (PCE) Price Index data, the Fed’s preferred gauge of inflation, for May will be featured in the US economic calendar. Markets expect the monthly core PCE Price Index, which excludes volatile food and energy prices, to rise 0.1%. The market reaction to this data is likely to be straightforward and remain short-lived. A stronger-than-anticipated increase could support the USD in the immediate term.

Investors will also pay close attention to the changes in risk perception heading into the weekend. At the time of press, US stock index futures were up about 0.3%. A continuation of the risk rally could make it difficult for the USD to find demand and allow GBP/USD to inch higher.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart started to edge lower after rising above 70 on Thursday, suggesting that GBP/USD is in a correctional phase before extending its uptrend.

On the upside, interim resistance seems to have formed at 1.3750 ahead of 1.3790-1.3800 (upper limit of the ascending channel, static level) and 1.3860 (static level). Supports could be seen at 1.3700 (static level, round level), 1.3630 (mid-point of the ascending channel) and 1.3600 (static level).

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Copper price took advantage of the positive factors by confirming the obstacle at $4.8900, to notice by the above image, forming a strong bullish rally achieving the main targets by reaching $5.0700 level and settles around it.

By the above image, we notice forming $5.1000 level to previous liquidity grab zones, to form an extra barrier against the bullish trading in the current period, to expect the price affection by the domination of the sideways bias domination temporarily, while the continuation of the fluctuation below this barrier might increase the chance for activating the bearish correctional track, which might target $4.9100 level.

The expected trading range for today is between $4.9600 and $5.1000

Trend forecast: Fluctuated with the bullish track

Copper price took advantage of the positive factors by confirming the obstacle at $4.8900, to notice by the above image, forming a strong bullish rally achieving the main targets by reaching $5.0700 level and settles around it.

By the above image, we notice forming $5.1000 level to previous liquidity grab zones, to form an extra barrier against the bullish trading in the current period, to expect the price affection by the domination of the sideways bias domination temporarily, while the continuation of the fluctuation below this barrier might increase the chance for activating the bearish correctional track, which might target $4.9100 level.

The expected trading range for today is between $4.9600 and $5.1000

Trend forecast: Fluctuated with the bullish track

Despite the neediness of the GBPJPY pair to the positive momentum, but the main stability within the bullish channel’s levels that pushed it to form a new positive move, to hit the target at 198.80, facing 66.8%Fibonacci correction level as appears in the above image.

The current trading scenario depends on the strength of 198.80 level, if it settles we expect forming bearish correctional trading that might push it to suffer some losses by reaching 197.40 and 169.85, while the price success in achieving the breach and providing a positive close above it, will reinforce the chances for recording extra gains by its rally to 199.55.

The expected trading range for today is between 197.40 and 198.80

Trend forecast: Bearish

June 27, 2025 – Written by James Fuller

STORY LINK Pound to US Dollar Forecast: GBP must hold above 1.3595

The easing of immediate Middle East fears has put the focus firmly back on underlying fundamentals with the dollar sliding amid fresh fears that Fed independence will be compromised.

Following the latest salvo against Fed Chair Powell from President Trump, there has been increased speculation that there will be an early nomination of the next chair and fresh talk that Powell could be dismissed by Trump.

The dollar index has slumped to the lowest level since February 2022 while the Pound to Dollar (GBP/USD) exchange rate has surged to 44-month highs above 1.3750.

MUFG commented; “Broad-based US dollar weakness helped to lift EUR/USD and cable overnight as they continue to move back closer towards the highs set back in late 2020/early 2021 when they peaked at just above 1.2000 and 1.4000.”

Markets will be looking to attack 1.40 in GBP/USD, although there is tough resistance close to current levels and the dollar is potentially oversold.

ING commented; “Downside risks for the dollar persist, but another 1-2% plunge in DXY will look stretched without any dovish repricing in Fed expectations or tariff/deficit concerns resurfacing.”

UoB noted resistance near 1.3750 and added; “To sustain the buildup in momentum, GBP must hold above the ‘strong support’ level, currently at 1.3595.”

Fed Chair Powell maintained a cautious stance in his second round of testimony to Congress. The rejection of a near-term rate cut has triggered another blast of criticism from President Trump who has again threatened to fire Powell and name a successor quickly.

MUFG noted a Wall Street Journal report that a successor to Powell could be named by September at the latest and potentially next month.

The bank added; “It highlights how an early pick could be used as way to try to undermine the Fed’s policymaking under Chair Powell providing a further potential trigger for a loss of investor confidence in the US dollar.”

There have been reports that Trump is considering former Fed governor Kevin Warsh, National Economic Council director Kevin Hassett and Treasury Secretary Scott Bessent as potential candidates.

According to MUFG; “Other contenders include former World Bank President David Malpass and Fed governor Christopher Waller.”

The bank summarised; “A candidate who is perceived as being more open to lowering rates in line with President Trump’s demands would reinforce the US dollar’s current weakening trend.”

IG market analyst Tony Sycamore commented; “I think it’s a given that Trump’s pick to succeed Powell, when it comes, will be one that sits at the highly dovish end of the spectrum and will support Trump’s agenda of lowering interest rates.”

He added; “The issue with this is it will resurface questions from earlier in the year around the Fed’s independence, which, as we saw, undermines confidence in the Fed and the USD.”

There has been a shift in market pricing with a rate cut by September now seen as inevitable with markets also seeing the most likely outcome as three rate cuts by the end of 2025.

In contrast, markets are pricing in two Bank of England rate cuts by the end of 2025 which would help underpin the Pound on yield grounds.

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TAGS: Pound Dollar Forecasts

• During the trading session on Thursday, we have seen the euro go back and forth against the British pound, as we continue to hang around just above the crucial 0.85 level.
• This is an area that’s been important multiple times on the way up as well as the way down, and as a result I think we’ve got a situation where market memory is coming into play.

I tend to use this pair as a measuring stick, and as a relative strength meter for these 2 currencies. If we get a stronger currency in this pair, typically that currency will do better against the US dollar. This is a great way to triangulate what should be happening in the EUR/USD or GBP/USD pairs, and it’s a trick I use all the time. Ultimately, it comes down to whether or not the US dollar is strong or weak and then picking which one of these 2 currencies are heading in the opposite direction and will give you the most “bang for your buck.” It’s not that both currencies can’t rise against the US dollar, but over the last couple of weeks, you can see that the euro rose against the British pound, and it’s no big surprise that arose against the US dollar simultaneously.

Technical Analysis

The technical analysis for this market is a bit interesting at the moment, because we broke so much higher than the 50 Day EMA, and now look like we are trying to do everything we can to form some type of bullish flag. Whether or not that holds up remains to be seen, because it is a little bit early to call it that, but if we can break out to the upside, it’s worth noting that the “measured move” of the bullish flag as to the 0.8650 level, an area that’s been important multiple times in the past and I do believe would be resistance. On the other hand, if we were to break down below the 0.85 level, we do have the 50 Day EMA sitting just below there to offer even more support.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

GBP/USD Forecast: Pound Sterling surges, Shell banned from attempting BP takeover for six months

GBP/USD extended its rally and touched its highest level since October 2021 above 1.3750 on Thursday. The heavy selling pressure surrounding the US Dollar (USD), on renewed concerns over the Federal Reserve losing its independence, could allow the pair to continue to push higher despite overbought conditions.

The Wall Street Journal (WSJ) reported late Wednesday that United States President Donald Trump was planning to announce his candidate for the next Chairman of the Federal Reserve (Fed) early, by September or October, to undermine Fed Chairman Jerome Powell. The news outlet claimed that Trump is evaluating Kevin Hassett’s, Director of the National Economic Council, and Treasury Secretary Scott Bessent’s commitment to lower interest rates as they are among the names that could potentially replace Powell. Read more…

GBP/USD outlook: Cable keeps firm tone, further gains likely after consolidation

Cable remains steady and holds within a narrow consolidation just below new multi-month high (1.3648), posted on Tuesday, following strong bullish acceleration in past two days.

Revived risk appetite on growing confidence in still fragile ceasefire in the Middle East, continues to underpin near-term action, as markets await more details from Fed Powell’s second day of testimony to Senate Banking committee. Read more…

• The Euro trades lower against the British Pound on Tuesday, snapping a steady winning streak that began earlier in June.
• The cross is edging lower, quoted around 0.8533 during the American trading hours, down about 0.40% on the day.
• RSI has eased from overbought territory and is drifting lower at 59.83, while the MACD remains slightly positive but shows signs of flattening momentum.

The Euro (EUR) is slipping against the Pound today, putting the brakes on a solid run that saw buyers firmly in control for nearly two weeks. The EUR/GBP cross is edging lower, trading around 0.8527 during the American trading hours, down about 0.40% on the day.

Zooming in on the daily chart, the broader trend structure remains constructive despite today’s short pullback. EUR/GBP continues to trace a well-respected rising channel that has guided price action since late January. Within this structure, buyers have consistently stepped in near the lower boundary and the 21-day EMA, which now sits close to 0.8496, cushioning dips.

However, the pair is encountering resistance near the 0.8550 psychological level, which aligns with the 50% Fibonacci retracement of the April peak to the May low. This area, overlapping with the channel’s midline, is drawing profit-taking and testing the strength of the recent bullish momentum.

Momentum signals suggest caution in the near term. The Relative Strength Index (RSI) has retreated from overbought levels and is currently at 59.83, implying the recent bullish push may be cooling off. Meanwhile, the MACD histogram remains in positive territory but hints at flattening momentum, signaling that the rally could stall without fresh catalysts.

A sustained daily close above 0.8600 would validate the bullish case and open the path toward 0.8740 — the April high and channel ceiling. Conversely, if the pullback deepens, the 21-day EMA near 0.8496 provides immediate support, followed by stronger buying interest around the 38.2% Fib at 0.8504 and the lower channel boundary near 0.8400.