GBP/USD Price Analysis – March 19, 2025
Daily Price Outlook
During the European trading session, the GBP/USD currency pair is under pressure, trading around 1.2960. Traders are taking a cautious approach as they await important economic events.
Market participants are looking ahead to the UK labor market data for the three months ending in January and the Bank of England's (BoE) monetary policy decision on Thursday.
UK Economic Uncertainty and Labor Market Data Weigh on GBP
On the GBP front, the upcoming release of the UK’s labor market data is crucial, particularly the Average Earnings figures. Analysts expect a steady growth rate of 5.9% for Average Earnings, both including and excluding bonuses.
However, reports from Brightmine show a slowdown in pay growth, mainly due to businesses being cautious ahead of the payroll tax increase in April. Many companies are planning hiring freezes or restructuring, with some considering pay freezes, which could weigh on earnings growth.
At the same time, the Bank of England's (BoE) policy decision is a key focus for the markets. The BoE is expected to keep interest rates steady at 4.5%, with a split vote of 7-2 in favor of maintaining the current rate.
However, two members, Catherine Mann and Swati Dhingra, are likely to support a rate cut. This divergence in the BoE's stance, combined with weak earnings growth, could put pressure on the GBP/USD, potentially weakening the pound further against the dollar.
Impact of US Federal Reserve's Policy Decision and Trade Tensions on GBP/USD Performance
On the US front, the broad-based US dollar remains strong ahead of the Federal Reserve’s upcoming monetary policy decision. While the Fed is expected to keep interest rates unchanged between 4.25% and 4.50%, there is a strong possibility of a rate cut by June, according to the CME FedWatch tool.
The Fed’s dot plot, which shows policymakers’ expectations for future rate changes, along with the Summary of Economic Projections (SEP), will be closely watched by traders.
Moreover, ongoing trade tensions, especially the US’s tariff policies, could add inflationary pressures, with some estimates suggesting a 1% increase in inflation in the short term. This uncertainty may impact market sentiment and influence the performance of the GBP/USD pair.
GBP/USD – Technical Analysis
GBP/USD is trading around $1.29787, down slightly as the pair faces resistance near the $1.29908 pivot point.
Despite recent attempts to push higher, the pound remains under pressure, with immediate resistance at $1.30097 and further upside barriers at $1.30280 and $1.30457. If buyers fail to reclaim $1.29908, the pair could see renewed selling pressure.
On the downside, $1.29521 is the first level of support, followed by $1.29286 and $1.29106 if bearish momentum accelerates.
The 50-day EMA at $1.29616 is providing dynamic support, but a breakdown below this moving average could trigger a sharper decline.
A break below $1.29908 could confirm additional weakness, targeting $1.29521 and $1.29286 in the near term.
Conversely, if the pair manages to rise above $1.30097, it may attract fresh buying interest, but sustained gains remain uncertain amid global risk factors.
Traders should monitor $1.29521 closely, as a breach of this level could accelerate losses, pushing GBP/USD toward $1.29286.
For now, the pair remains vulnerable to downside risks, with price action likely dictated by upcoming economic data and central bank commentary.
Related News
- GOLD Price Analysis – March 19, 2025
JOIN LHFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.