**GBP/USD Forecast – 5 August 2025**
*By: Maurice Mokaya, DailyForex.com*
The GBP/USD currency pair remains a central focus for forex traders due to its high liquidity and sensitivity to both macroeconomic developments and monetary policy shifts in the United Kingdom and the United States. As we move into early August 2025, the cable finds itself at the intersection of diverging economic data, shifting central bank outlooks, and ongoing geopolitical developments. This in-depth analysis covers:
– The current technical landscape for GBP/USD
– Fundamental factors influencing near-term price action
– The market’s sentiment and major risk drivers
– Potential trading scenarios and key levels to watch
**Current Technical Landscape**
GBP/USD started August 2025 trading with a moderate bullish bias, following a period of consolidation observed in late July. A close look at daily, 4-hour, and hourly charts reveals several technical features of significance:
*1. Trend Analysis*
– The daily chart illustrates a mild uptrend that began from the July low near 1.2640. A series of higher lows and higher highs confirm the bullish structure.
– The 50-period simple moving average (SMA) on the 4-hour chart has recently crossed above the 200-period SMA, forming a “golden cross” pattern. This is widely considered a bullish signal.
– The pair has broken above a major resistance at 1.2770 and is approaching the psychological 1.2850 mark.
*2. Key Support and Resistance Levels*
– Immediate resistance stands at 1.2850, a confluence zone combining a round figure and previous swing highs.
– Should 1.2850 break decisively, further resistance can be found at 1.2920, followed by the June high at 1.2980.
– On the downside, initial support is visible at 1.2770, followed by stronger support at 1.2700 and 1.2640 (July low).
*3. Momentum Indicators*
– Relative Strength Index (RSI) on the daily chart hovers near 61, indicating bullish momentum, but not yet into overbought territory.
– MACD histogram remains positive with the signal line pointing upwards, confirming continued upward momentum.
– The 14-day Average True Range (ATR) shows moderate volatility, suggesting room for expansion if key levels break.
*4. Candlestick Patterns*
– Recent daily candles have produced a series of bullish closes, with two large-bodied candles hinting at increasing buyer confidence.
– On the 4-hour chart, a bullish engulfing pattern formed at the 1.2770 support zone, providing confirmation of strong demand.
**Fundamental Factors Influencing GBP/USD**
A variety of macroeconomic and policy-driven factors have come together to shape the current outlook for GBP/USD:
*1. Bank of England (BoE) Policy Outlook*
– The BoE is widely anticipated to maintain a cautious stance amid persistent but slowly easing inflationary pressures.
– Key members of the Monetary Policy Committee have recently signaled that any interest rate cuts are likely to be gradual and data-dependent, with markets not fully pricing in a cut until late Q4 2025.
– The latest inflation print came in at 3.1 percent, down from previous months but still above the BoE’s 2 percent target, sustaining hawkish undertones.
*2. Federal Reserve Sentiment*
– The Federal Reserve has recently paused its tightening cycle amid clear signs of cooling inflation and a slowdown in certain economic sectors.
– Market participants are now focused on the timing and extent of the first rate cut, with the consensus leaning towards a cut in September or December 2025.
– Weakening US jobs data, with the July Nonfarm Payrolls coming in at 132,000 (vs expected 185,000), has increased pressure on the Fed to ease.
*3. UK Economic
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