Pound Sterling Price News and Forecast: GBP/USD may test three-month highs

FXStreet Team FXStreet

GBP/USD Price Forecast: Holds above nine-day EMA near 1.3450

GBP/USD edges higher on the first day of the year, trading around 1.3470 during the Asian hours on Friday. The technical analysis of the daily chart indicates a weakening of a bullish bias as the pair remains slightly below the lower boundary of the ascending channel pattern.

The nine-day Exponential Moving Average (EMA) rises and stands above the 50-day EMA, with spot holding over both and maintaining a bullish bias. The 50-day EMA slope is positive, supporting the uptrend. Short-term trend dynamics remain supportive as the nine-day EMA continues to lead the 50-day EMA, and price respects the former on pullbacks. The moving average configuration would keep the topside favored while the medium-term average edges higher. Read more...

GBP/USD gathers strength above 1.3450 on Fed rate cut bets, BoE's gradual policy path

The GBP/USD pair gathers strength to around 1.3480 during the early Asian session on Friday. Expectations of the US Federal Reserve (Fed) rate cuts this year weigh on the US Dollar (USD) against the Pound Sterling (GBP). Philadelphia Fed President Anna Paulson is set to speak later on the weekend.

The Greenback ended 2025 with the sharpest annual decline in eight years. With at least two rate reductions priced in for this year, the Fed's policy path diverges from the United Kingdom (UK), dimming the USD's appeal. Financial markets are pricing in nearly a 15.0% chance the Fed will cut interest rates at its next meeting in January, according to the CME FedWatch tool. Read more...

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