**British Pound Forecast: GBP/USD Breaks 2025 Uptrend Ahead of BOE**
*Original article by Fiona Cincotta for FOREX.com. This reproduction credits the original author.*
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## Introduction
The British pound (GBP) has faced significant volatility ahead of the Bank of England’s (BOE) upcoming monetary policy decision. Recently, the GBP/USD pair broke below a key uptrend that has defined its performance throughout much of 2025. This development reflects a convergence of factors, ranging from shifting central bank expectations, evolving economic data, and global risk sentiment. In this comprehensive analysis, we will discuss the underlying causes of the GBP/USD’s technical breakdown, the policy outlook for the BOE, and the broader operational context for traders and investors navigating current forex market conditions.
## GBP/USD Technical Analysis
### Break of 2025 Uptrend
GBP/USD had been trading within a well-defined uptrend channel since the beginning of 2025. This uptrend has been repeatedly tested by bouts of volatility, but the latest price action finally broke through key support levels.
– **Key levels breached**: The pair broke through the rising trendline and dropped below the psychological 1.27 level. Traders had viewed this as a critical support for the year.
– **Momentum indicators**: Technical studies such as the Relative Strength Index (RSI) now suggest bearish momentum, with the RSI dropping below 50 for the first time in months, indicating that selling pressure may intensify in the near term.
– **Short-term support and resistance**:
– Immediate support is identified at 1.2630, followed by a lower area near 1.2570.
– Initial resistance is expected at the former support of 1.2700, then at the moving averages (such as the 50-day and 200-day), now both tilting downward.
### Chart Patterns
– The break below ascending support reflects a broader loss of bullish conviction.
– Candlestick analysis reveals back-to-back bearish days, signaling sustained downward pressure.
– Previous bounces off the 1.27 threshold gave way to sellers, suggesting a shift in market dynamics.
## Macroeconomic Factors Influencing Sterling
Sterling’s recent weakness is not occurring in a vacuum. Instead, it reflects a more nuanced interplay between macroeconomic fundamentals in the UK, monetary policy outlook, and global risk aversion.
### UK Economic Data
Recent UK economic reports have been mixed, adding to market uncertainty:
– **Inflation**: UK inflation, while gradually falling, remains slightly above the BOE’s 2 percent target. Recent data show core inflation is still sticky, complicating the case for immediate policy easing.
– **Labour market**: Wage growth has slowed, yet unemployment remains near historic lows. This mix suggests some resilience, but also hints at cost pressures moderating.
– **Growth**: The UK economy is navigating a modest recovery. GDP growth has been sluggish but is no longer contracting, meaning stagflation fears have receded somewhat.
### Market-Based BoE Expectations
– Markets are divided on how soon the Bank of England will cut interest rates.
– Prior to the uptrend break, expectations were for a summer cut, but this has been thrown into question by sticky inflation and less dovish commentary from BOE officials.
– Money markets are now pricing more conservative rate-cutting expectations compared to earlier in the year.
### Global Risk Environment
– The broader risk-off tone in global markets, partly triggered by renewed geopolitical worries, has weighed on “risk” currencies like sterling.
– The US dollar’s broad-based resurgence has contributed to the selling of GBP/USD, as investors have retreated to safe havens.
## BOE Policy Meeting: What’s at Stake?
The upcoming Bank of England decision is particularly consequential for GBP/USD and traders across the forex market.
### Key Policy Considerations
– **Interest Rates**: The BOE has maintained a cautious policy
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