**GBP/USD Reverses Ahead of March Low to Stage Three-Day Rally**
*Originally authored by Fiona Cincotta, Forex.com*
The GBP/USD currency pair has recently experienced a notable reversal, rebounding robustly after briefly flirting with its March lows. As volatility characterizes currency markets in April 2025, the British pound’s performance against the US dollar has drawn considerable interest due to several contributing factors, ranging from macroeconomic data releases to shifting monetary policy expectations. This article provides an in-depth exploration of GBP/USD price action, market drivers, technical analysis, and outlook, synthesizing insights from the original Forex.com report by Fiona Cincotta and current market commentary.
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### **Overview of Recent GBP/USD Performance**
The pound sterling’s journey in early April set the stage for a dramatic turnaround. After dipping perilously close to the lows set in March 2025, GBP/USD found strong buying interest which has propelled the pair into a three-day rally as of April 10. This move comes amid heightened sensitivity to macroeconomic data and growing speculation on policy pathways from both the Bank of England (BoE) and the US Federal Reserve (Fed).
#### **Key Developments Leading to the Rally**
– **Testing March Lows**: The pair approached, but ultimately reversed just above, the critical March support near 1.2545—a level not seen since the first quarter. This failure to breach the base triggered technical buying and forced short covering.
– **Three Sessions of Gains**: Midweek, GBP/USD posted gains for three consecutive days, underscoring a swift shift in market sentiment from bearish to bullish.
– **Contributing Factors**: Dollar weakness, BoE comments, and critical inflation data releases combined to support the pound.
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### **Fundamental Drivers of the GBP/USD Rebound**
The GBP/USD exchange rate’s resilience has not occurred in a vacuum. Instead, it reflects the interplay of economic indicators, central bank rhetoric, and investor positioning. The following factors have played a central role in the latest rebound:
#### **1. US Dollar Dynamics**
– After a solid run in March and early April, the US dollar index (DXY) struggled to maintain momentum.
– Softer US data releases, particularly labor market and services sector reports, dented confidence in further Fed tightening.
– Markets recalibrated expectations, scaling back projections for aggressive rate hikes later in 2025, prompting outflows from the safe-haven greenback.
#### **2. Bank of England Cooling Rate Cut Hopes**
– The BoE continued to emphasize patience, with policymakers expressing caution over premature rate cuts despite easing UK inflation.
– The March UK CPI report showed a slight moderation but remained well above the BoE’s 2 percent target, suggesting persistent price pressures.
– BoE officials, including Governor Andrew Bailey, reinforced the message of a data-dependent approach, which helped support sterling.
#### **3. UK Economic Data Surprises**
– The release of robust UK employment figures defied some downbeat projections.
– Wage growth figures, especially average weekly earnings, surprised to the upside, underscoring tight labor market conditions and bolstering the case for the BoE to maintain its restrictive stance.
– UK services PMI data signaled momentum in the dominant service sector, further underpinning the currency.
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### **Technical Analysis of GBP/USD**
Technical factors have been instrumental in guiding the recent rally. The interaction between price, moving averages, and support/resistance zones provided traders with critical cues. Here is a breakdown of the technical landscape:
#### **Key Technical Levels**
– **Support at March Low (1.2545-1.2560)**: Bulls defended this area, which had previously acted as a springboard for rebounds. The successful defense of this level emboldened buyers and triggered a reversal.
– **200-DMA and 50-DMA**: The pair’s ability to reclaim the 200-day moving average (now around 1
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