GBP/USD Price Analysis – March 31, 2025
Daily Price Outlook
The British Pound (GBP) is holding firm against the U.S. Dollar (USD), hovering under 1.2950 despite mounting global uncertainty and a hotter-than-expected U.S. inflation report. At the time of writing, GBP/USD trades under 1.2950, virtually flat on the day as traders parse a mix of macro data and geopolitical developments.
The market is currently digesting February’s PCE Price Index, released by the U.S. Bureau of Economic Analysis (BEA). The headline print held steady at 2.5% YoY, while the core PCE, the Federal Reserve’s preferred inflation gauge, rose to 2.8%—slightly above January’s 2.7% and market expectations.
The inflation data adds complexity to the Fed’s rate outlook, especially as price growth continues to drift above the 2% target. However, deteriorating sentiment from U.S. consumers may temper expectations of near-term policy tightening.
Consumer Sentiment Slides as Inflation Expectations Rise
The University of Michigan’s Consumer Sentiment Index fell to 57.0 from the preliminary reading of 57.9, reflecting growing pessimism among U.S. households. Short-term inflation expectations jumped to 5%, while five-year projections edged up to 4.1%—fueling concerns about sticky inflation.
“This month’s decline reflects a clear consensus across all demographic and political affiliations,” the report stated, underscoring the broad-based anxiety across the U.S. economy.
UK Macro Data Surprises to the Upside
On the UK side, economic data offered a more positive tone. While February Retail Sales declined compared to January, the 1.0% MoM increase came in well above economist expectations of a 0.3% decline.
Additionally, the UK economy grew by 0.1% in Q4 2024, meeting forecasts from the Office for National Statistics (ONS).
This upbeat data helped push GBP/USD to an intraday high of 1.2967, although the pair later pared gains as investors absorbed the stronger U.S. inflation readings.
Conclusion
Despite pressure from U.S. inflation data and trade uncertainty, GBP/USD remains resilient—underpinned by solid UK data and fading Fed rate hike expectations. However, the path forward will be shaped by how markets react to Trump’s tariff policy, labor market reports, and the evolving macro landscape.
GBP/USD – Technical Analysis
The British pound is once again testing the lower end of a narrow consolidation zone as GBP/USD slips to $1.29331.
Price action remains range-bound below the descending trendline extending from the March high, with bearish pressure mounting as the pair struggles to reclaim the $1.29582 resistance.
The pair is now hovering just above a key pivot zone at $1.29187—an area that, if broken, could shift momentum firmly in favor of the bears.
The setup favors a short position below $1.29187, targeting $1.28670 as the next support, with a protective stop placed at $1.29582.
This configuration offers a risk-reward ratio of approximately 1:2, ideal for short-term positioning in a market that remains technically indecisive.
RSI currently reads 48.36—below the neutral midpoint—indicating fading bullish momentum and the potential for a deeper pullback if price closes below support.
The 50-period Simple Moving Average sits at $1.29286 and is now flatlining, suggesting a loss of directional bias.
However, a break below the moving average and horizontal support could open the door to further downside toward $1.28300.
Meanwhile, bulls would need to clear $1.29704 to invalidate the bearish scenario and shift momentum higher toward $1.30143.
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