**British Pound Forecast: GBP/USD Breaks 2025 Uptrend Ahead of Bank of England Meeting**
*Adapted from original analysis by Fiona Cincotta, FOREX.com*
The British pound has entered a notably volatile phase heading into the August 2025 Bank of England (BoE) rate decision, as anticipation grows over the pace and extent of future monetary easing. The GBP/USD pair has recently breached a significant uptrend support line established earlier in 2025, prompting questions about the next directional bias for the currency pair. This article analyses key developments, technical levels, and fundamental forces shaping the pound’s outlook in the coming weeks and months.
## The BoE: Market Expectations and Policy Context
The Bank of England remains at a challenging crossroads. Amid slowing inflation but lingering uncertainty over underlying wage and price pressures, policymakers have signaled caution about the timing of their first rate cut. Since late 2024, the BoE has maintained a “higher-for-longer” tone even as headline inflation has dropped close to target.
**Key BoE Influences for Sterling:**
– Annual UK inflation slowed to 2.0% in June 2025, essentially hitting the BoE’s target, after peaking well above 10% in 2022.
– Wage growth, however, remains robust, with the three-month average annual earnings growth still around 5.5%, suggesting lingering inflationary risks.
– BoE Governor’s recent comments have illustrated a cautious stance, noting that “risks of inflation persistence remain.”
– Futures markets currently price in two to three 25bps cuts for the remainder of 2025, starting as early as the autumn, but these odds have shifted in response to data surprises.
With the BoE expressing reservation about the pace of rate cuts, the focus for the pound is firmly on forward guidance and data dependency. Any dovish tilt at the August meeting, or evidence of inflation easing further, could be seized upon by traders as a signal to accelerate pound selling.
## GBP/USD Technical Landscape: Breaking the Uptrend
Since the start of 2025, the GBP/USD had been trading within an ascending channel, supported by optimism around the UK’s economic prospects and relative resilience in the face of Eurozone stagnation. That supportive bias was recently thrown into question as the currency pair broke decisively below its established 2025 uptrend on the daily chart.
**Technical highlights:**
– The trendline, drawn from January’s swing lows (around 1.2500) and connecting the March and May 2025 troughs, was violated in late July, triggering technical selling pressure.
– Momentum studies (such as the daily RSI) have rolled over, signaling a shift from overbought to a neutral-to-bearish posture.
– The breakdown coincided with the GBP/USD slipping below its 50-day and 100-day moving averages, both important barometers for medium-term trend followers.
## Immediate Technical Levels to Watch
With the trendline breach, traders are re-calibrating their focus to the following support and resistance zones:
**Key GBP/USD Support Levels:**
– 1.2700: Psychological level and former resistance-turned-support from the Q2 2025 consolidation.
– 1.2610: Late May swing low. A loss of this area would confirm bearish control in the near term.
– 1.2500: The year-to-date low and a magnet for medium-term stops.
**GBP/USD Resistance Levels:**
– 1.2850: Now the first line of defense for GBP bears.
– 1.2950/1.3000: Previous multi-month high, representing significant overhead supply.
– 1.3120: The 2024/2025 cycle high, only likely relevant if fundamental sentiment swings sharply back to sterling favor.
Traders should watch for price action and buying interest at these support levels, especially if key macro data surprises the
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