GBP/USD Analysis: Pair Recovers from 7-Month Low
The GBP/USD pair dropped below the psychological level of 1.25 today, a level last seen in early May. Over the past two days, the pair has declined by more than 1.5%, driven by central bank decisions.
On one hand, the US dollar strengthened after the Federal Reserve chair's comments on Wednesday, hinting at potentially higher interest rates in 2025.
On the other hand, the pound weakened on Thursday after news from the Bank of England (BoE). According to media reports:
The BoE kept the interest rate unchanged.
Market expectations for the BoE's February decision are putting additional pressure on the pound.
Technical analysis of the GBP/USD chart reflects a continuation of bearish momentum, with the pair moving within a descending channel:
In mid-December, the price broke below the lower boundary of a narrowing triangle (highlighted in blue), signalling the potential resumption of the downtrend.
Around the same time, trading was concentrated near the 1.265 level. Despite repeated tests of this level, it seems that the bears took control.
Looking ahead, the pair may consolidate near the channels median line as the year comes to a close, with this zone acting as a balance point between supply and demand. Stronger directional moves might materialise in 2025.
Read more: https://fxopen.com/blog/en/oa-gbp-usd-analysis-pair-recovers-from-7-month-low/
Text source: Forex Trading Blog
