GBP/USD Price Analysis – March 12, 2025
Daily Price Outlook
During the European trading session, the GBP/USD currency pair struggled to maintain its upward momentum, retreating near the 1.2914 level.
The pair is now hovering around 1.2942 as the US Dollar gains temporary support ahead of key inflation data from the United States.
However, the US Consumer Price Index (CPI) data for February, due at 12:30 GMT, is set to be a major driver for market expectations regarding the Federal Reserve’s (Fed) monetary policy stance.
Investors remain cautious after Fed Chair Jerome Powell recently signaled that the central bank could maintain its restrictive policy for longer if inflation does not ease as expected.
Market forecasts suggest that headline inflation may slow to 2.9% from 3.0% in January, while core CPI is expected to rise by 3.2%, slightly down from 3.3%.
If inflation cools, expectations for a Fed rate cut in May could grow, with the CME FedWatch Tool showing a 42% chance—up from 10.4% last month.
However, higher-than-expected inflation could reduce these chances, strengthening the US Dollar and limiting the Pound’s gains.
GBP/USD Supported by BoE Rate Expectations and Upcoming UK Economic Data
Despite some pressure on GBP/USD, the Pound is still supported by expectations that the Bank of England (BoE) will keep its interest rate at 4.5% during next week’s policy meeting.
Several BoE officials, including Governor Andrew Bailey, have stressed the need for a cautious approach to reducing restrictive policies, pointing to ongoing inflation concerns.
However, BoE member Catherine Mann has suggested a more aggressive approach to easing due to the volatility in global financial markets.
Moreover, traders are keeping an eye on the UK’s upcoming economic data, including the January Gross Domestic Product (GDP) report and Industrial and Manufacturing Production figures, scheduled for release on Friday.
The UK economy is expected to have expanded by 0.1% in January, down from 0.4% in December, while factory data is likely to show a decline.
Market Uncertainty and Key Data Events Ahead for GBP/USD
Adding to market uncertainty is former US President Donald Trump’s position on trade policies. His recent threats to double tariffs on Canadian steel and aluminum imports caused concern among investors.
However, the decision was reversed after talks with Canadian officials. US Commerce Secretary Howard Lutnick explained that Trump’s tariff threats are often used as bargaining tactics in trade negotiations. Still, the unpredictability of these policies continues to affect market sentiment.
Looking ahead, GBP/USD traders will closely monitor the US inflation report and upcoming UK economic data for further direction.
However, the softer inflation print from the US could weaken the Dollar and support GBP/USD, while strong inflation figures might reinforce the Fed’s hawkish stance, limiting the Pound’s upside potential.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.29285, showing slight downward pressure but maintaining stability above the key pivot point at $1.29094. The 50-day EMA at $1.29086 reinforces this level, suggesting that staying above it could keep the pair in a bullish zone.
On the upside, immediate resistance is at $1.29655, followed by $1.30114 and $1.30606. A break above $1.29655 could spark further upside momentum, with traders eyeing the psychological $1.30 level as a potential inflection point. However, failing to surpass resistance may lead to continued range-bound movement.
Support levels lie at $1.28691, $1.28206, and $1.27756. A drop below $1.28691 could indicate renewed selling pressure, possibly pushing the pair toward $1.28206, where stronger demand could emerge. The 50-day EMA at $1.29086 is a key short-term threshold—if breached, it could shift sentiment to the downside.
A buy strategy above $1.29094 is preferred, targeting $1.29788 while maintaining a stop-loss at $1.28740 to mitigate risk.
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