GBP/USD Forex Signal: Sterling Could Retreat Ahead of the US GDP Data – 30 January 2025

Bearish view

-- Sell the GBP/USD pair and set a take-profit at 1.2350.
-- Add a stop-loss at 1.2600.
-- Timeline: 1-2 days.
Bullish view

-- Set a buy-stop at 1.2450 and a take-profit at 1.2525.
-- Add a stop-loss at 1.2350.

The GBP/USD pair was flat after the Federal Reserve left interest rates unchanged in its first interest rates of the year. It was trading at 1.2440 on Thursday morning ahead of the upcoming US GDP data.

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Federal Reserve rates and US GDP data

The GBP/USD pair wavered after the Federal Reserve made its first interest rate decision of the year. In, the Federal Open Market Committee (FOMC) decided to leave interest rates unchanged at 4.50%.

The committee tweaked its statement by removing any mention of progress on inflation. This was likely a reaction to a recent report that showed that the headline Consumer Price Index (CPI) rose from 2.7% to 2.9% in December.

The Fed expects the headline inflation to take a longer period before moving back to the 2.0% target. The top inflation risks are the recent wildfires in Los Angeles that hav made most things, including housing and insurance expensive. There are also concerns that some of Donald Trump’s policies like mass deportations, tariffs, and tax cuts will lead to high inflation.

The Fed maintained the view that the economy was solid and that the labor market was making progress. As such, most analysts anticipate that the Fed will hold interest rates steady and then cut in July.

The next important GBP/USD news will be the upcoming US GDP data, which will shed more color on the state of the economy. Economists expect the data to show that the US capped a good year, growing by 2.7% in the fourth quarter.

The GBP/USD pair may remain under pressure now that analysts expect the Bank of England to be more aggressive in cutting rates ; this year since the economy is slowing.

GBP/USD technical analysis

The daily chart shows that the GBP/USD pair peaked at 1.3435 in September and has now dropped to 1.2450. Its recent rebound found substantial resistance point at the 50-day Exponential Moving Average (EMA).

The pair has moved slightly above the upper side of the descending channel pattern. It has also dropped below the Ichimoku cloud indicator. The Relative Strength Index and the MACD indicators have pointed upwards.

Therefore, the pair will likely resume the downward trend, and possibly retest the key support at 1.2350. A move above the 50-day moving average will point to more gains and invalidate the bearish view.

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.