GBP/USD Price Forecast - GBPUSD=X Stalls Around 1.3630 as Weak UK GDP Meets Robust US Jobs Data

GBP/USD – Cable pinned near 1.3630 as weak UK growth clashes with resilient US data

GBP/USD – Price, range and current positioning

GBP/USD trades around 1.3630–1.3640, effectively flat on the session after testing the 1.3600 area earlier in the day. The pair is still up roughly 1.6% year-to-date, so the move is a pause inside an uptrend, not a reversal. Intraday ranges are tight: price is oscillating in a narrow band between 1.3600 on the downside and roughly 1.3710–1.3715 on the upside, signalling that the market is waiting for a fresh catalyst before committing beyond the current consolidation zone.

GBP/USD – UK GDP miss and the BoE easing bias

The latest UK GDP data confirm that growth is positive but anaemic. Output expanded 0.1% q/q in Q4, below the 0.2% consensus and below the 0.2% figure projected by the Bank of England. December activity rose only 0.1% m/m, while November was trimmed to 0.2%, underlining a pattern of very modest expansion rather than any real acceleration. For 2025, the economy grew 1.3%, a touch above 1.1% in the prior year, but that improvement is marginal in macro terms. This profile shifts the policy balance clearly toward easing: markets now price a 25 bp BoE cut as early as March, with investors expecting further reductions later in the year if the growth pattern doesn’t improve.

GBP/USD – Political temperature and the UK risk premium

Political noise has eased just enough to stop GBP from carrying a heavier risk discount. After weeks of pressure linked to the Epstein files fallout and the resignation of a key aide, Keir Starmer secured explicit backing from his cabinet and Labour MPs, reducing the probability of an immediate leadership challenge. His position is still weaker than it was, but the near-term risk of a full-scale political crisis has faded. That matters for GBP/USD because it limits the extent to which the pound needs to trade with a “political premium” embedded in the price. In other words, softer data and dovish BoE pricing are not being amplified by a domestic political shock, which helps keep the pair anchored above 1.3600 for now.

GBP/USD – US jobs strength, softer consumption and Fed timing

Across the Atlantic, the USD side of GBP/USD is driven by a contradictory mix of strong employment data and softer demand indicators. US Nonfarm Payrolls for January came in at +130,000 versus expectations of 70,000, the biggest increase in more than a year. The unemployment rate dropped to 4.3% from 4.4%, again better than forecast. Under normal conditions this combination would be clearly Dollar-positive. However, weaker-than-expected US retail sales and cautious comments from the White House on the sustainability of job growth have tempered the bullish narrative. Fed-funds pricing now implies about a 94% probability that the Federal Reserve leaves rates unchanged at the next meeting, up from around 80% before the report, and the first fully priced cut has slid from June to July, with the odds of a March move below 5%. The result is a firm but not surging USD, which limits downside in GBP/USD even as the Fed stays comparatively hawkish versus the BoE.

GBP/USD – Dollar Index structure and implications for Cable

The US Dollar Index (DXY) sits around 96.78–96.80, well below the recent 98.80 high but comfortably above its local floor near 95.55. On the 4-hour chart, the index is squeezed between a rising trendline that has supported price since late January and moving-average resistance. The 50-period moving average is drifting lower and capping rallies near 97.21, while the 200-period MA adds a heavier barrier around 97.90. Horizontal support rests at 96.34. If DXY breaks above 97.25, it can push toward 97.98 and then 98.80, which would put clear pressure on GBP/USD and likely drag it back below 1.3600. As long as DXY remains trapped between 96.34 and 97.25, though, the Dollar is consolidating rather than launching a fresh up-leg, and that allows GBP/USD to hold its ground despite the UK growth disappointment.

GBP/USD – Daily chart: moving averages, momentum and volatility bands

The daily structure for GBP/USD still leans mildly bullish. Price trades above the rising 100-day EMA at 1.3447, and that moving average continues to slope upward, confirming that the medium-term trend is still pointed higher. The RSI on the daily chart is near 53.6, above the neutral 50 line and turning up, which signals improving positive momentum rather than exhaustion. Volatility measured by Bollinger Bands is constructive: the middle band sits around 1.3618 and is acting as dynamic support, with spot hovering slightly above that level. The upper band comes in near 1.3873, and the recent swing high at 1.3713 from February 11 is the first significant barrier on the topside. A daily close above 1.3713 would confirm renewed upside momentum and bring the 1.3870–1.3873 area into play, while a close below the mid-band at 1.3618 would warn that the consolidation is tilting into a deeper correction toward the 100-day EMA near 1.3447.

GBP/USD – 4-hour chart: triangle compression and key tactical levels

On the 4-hour chart, GBP/USD is locked in a tightening triangle, reflecting indecision rather than trend change. Price trades around 1.3647, sitting almost exactly on the 50% Fibonacci retracement of the recent leg at 1.3635. A descending trendline caps rallies near 1.3700, while an ascending support line anchored at the 1.3510 low has contained all pullbacks. This convergence produces the characteristic small-bodied candles with short wicks that signal equilibrium between buyers and sellers. The 50-period MA runs flat through the price area and offers no clear directional clue, while the 200-period MA lies just underneath at 1.3560, reinforcing the importance of the 1.3550–1.3560 support band. A clear 4-hour close above 1.3695–1.3700 would confirm a topside break from the pattern and expose 1.3760, followed by 1.3810, as upside targets. Conversely, a break below the rising trendline and the 1.3550–1.3560 support cluster would invalidate the compression and open room for a slide back toward 1.3510 and potentially closer to the daily 100-day EMA at 1.3447.

GBP/USD – Event risk: UK growth narrative versus US inflation and labour releases

The current GBP/USD level around 1.3630 is the market’s way of balancing a soft UK story against a firm but not runaway US backdrop. On the UK side, the growth profile of 0.1% q/q in Q4 and 1.3% for 2025, combined with BoE expectations for a near-term 25 bp cut, justifies a lower real-rate outlook for the pound. On the US side, the +130k NFP print and 4.3% unemployment rate keep the Fed cautious about cutting too early, yet weak US retail sales and remarks about slower future job growth argue against an aggressive tightening bias. The next major directional impulse for GBP/USD will come from upcoming US weekly jobless claims and the CPI release. A hotter inflation print that pushes DXY above 97.25 would likely send GBP/USD through 1.3618 toward the 1.3550–1.3560 pocket. A softer-than-expected CPI that knocks the Dollar back toward 96.34 or even 95.55 would instead favour a break of the 1.3695–1.3713 ceiling.

GBP/USD – Trading stance: mildly constructive but capped, bias to buy dips

Taking all the numbers together, GBP/USD sits at a pivot zone rather than an exhaustion point. The UK side is clearly weaker: 0.1% q/q growth, 1.3% annual expansion, and a market leaning toward a March BoE cut are not bullish inputs. The US side, however, combines +130k payrolls and 4.3% unemployment with a patient Fed that is seen on hold until July, while the DXY at 96.78–96.80 is below its 98.80 peak and constrained by resistance at 97.21–97.90. Technically, daily support at 1.3618, the 100-day EMA at 1.3447, and 4-hour structure around 1.3550–1.3560 all argue that the pair is still in an uptrend phase. As long as GBP/USD holds above 1.3550, the bias is buy-on-dips with a constructive stance, aiming for a break above 1.3695–1.3713 toward the 1.3760–1.3810 zone. A decisive daily close below 1.3550 would downgrade that view to neutral and open the door to a deeper move toward 1.3447, but with current data and price action, the profile is mildly bullish rather than bearish, with controlled upside rather than an explosive trend.

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