**GBP/USD Forex Signal: 25th August 2025 — Bearish Momentum as Dollar Strengthens**
*Original author: Adam Lemon, DailyForex*
**Overview**
The GBP/USD currency pair, also known as “Cable,” has experienced a notable shift in momentum as August 2025 draws toward a close. The pair has shown distinct vulnerability to the strengthening US Dollar, amplified by market apprehension over global economic growth prospects, transatlantic monetary policy divergence, and evolving risk sentiment across Forex markets. In this comprehensive analysis, we break down the key drivers of GBP/USD, examine the technical landscape for the pair, and identify actionable trade opportunities for Forex traders.
**Market Drivers Influencing GBP/USD**
Several macroeconomic and market forces are intersecting to define the direction of GBP/USD this week:
– **US Dollar Strengthening:** Renewed demand for the US Dollar has stemmed from hawkish signals by Federal Reserve officials and unexpectedly resilient US macroeconomic data, particularly retail sales and labor market readings.
– **Risk Aversion:** Continued uncertainty regarding global growth, especially emanating from weakness in the Chinese economy, has fueled a tilt towards safe-haven assets, further bolstering the greenback.
– **Diverging Monetary Policies:** While the Fed maintains a data-dependent but overall hawkish tone, the Bank of England (BoE) faces pressure over more tepid UK economic data, reinforcing bearish sentiment toward Sterling.
– **Inflation Data:** Recent inflation prints in both the US and UK have underscored growing divergence. Sticky services inflation in the UK has fostered concerns for the BoE, though the broader economic slowdown has kept the central bank on guard.
– **Geopolitical Tensions:** Ongoing concerns over global security, trade flows, and regional instability have kept risk sentiment defensive, which tends to favor the Dollar over high-beta currencies such as Sterling.
**Technical Analysis Snapshot**
A comprehensive look at the GBP/USD technical framework, as of August 25, 2025, yields a distinctly bearish outlook. Recent sessions have seen successive lower highs and lower lows, signaling continued downside. Let’s dig deeper into the technical context:
– **Price Action:** The pair has retreated decisively below the key psychological level of 1.2600, showing consistent rejection at resistance near 1.2580.
– **Moving Averages:** The 50-period simple moving average (SMA) has crossed below the 200-period SMA, forming a bearish “death cross” on the 4-hour chart, further confirming downside bias.
– **Momentum Indicators:**
– The Relative Strength Index (RSI) is trending lower, but has not entered oversold territory, suggesting more room for decline.
– The MACD histogram remains negative and below its signal line, supporting the case for sustained bearish momentum.
– **Support Levels:** Immediate support lies at 1.2540, with firmer buying expected only near the 1.2500 round figure. Should this level break, the next deeper support sits at 1.2450 and 1.2400.
– **Resistance Levels:** First resistance is evident at 1.2580, further up at 1.2620, and then at the June swing high of 1.2690.
– **Trendlines:** A descending trendline from the August highs remains unbroken, capping Sterling’s attempts to recover.
**Key Price Zones to Watch**
– **1.2580 – 1.2600:** Short-term resistance zone, likely to attract sellers if tested
– **1.2540 – 1.2500:** Initial support area, crucial for near-term direction
– **1.2400:** Major support likely to trigger profit-taking or short-covering
**GBP/USD Trading Opportunities**
Given the prevailing pattern of downside pressure, traders should look for opportunities aligned with the path of least resistance. A cautious approach remains warranted to manage volatility risks,
Read more on GBP/USD trading.