**SocGen Pound to Dollar Forecast: Crucial GBP/USD Resistance Remains at 1.3590**
*Article based on analysis published by Adam Solomon, ExchangeRates.org.uk.*
The Pound to Dollar (GBP/USD) currency pair has encountered a significant resistance level, maintaining the focus of traders and analysts alike. With a turbulent macroeconomic landscape and evolving central bank policies, Société Générale’s (SocGen) latest forecast outlines key technical and fundamental factors expected to shape the GBP/USD trajectory into 2025. This article delves into current price action, influential economic drivers, and SocGen’s strategic perspective regarding the pair’s future, particularly the critical resistance at 1.3590.
## GBP/USD Overview: Recent Performance and Macro Backdrop
The Pound Sterling has demonstrated resilience in 2024, but the US Dollar’s strength has often capped further advances. The GBP/USD pair has oscillated as investors continually reassess:
– Bank of England’s (BoE) monetary policy normalization path
– Federal Reserve’s (Fed) interest rate policy and guidance
– UK economic performance versus US macro data
– Ongoing geopolitical and global risk sentiment
The interplay between these factors produces volatility, with traders gauging each policy announcement and economic release for clues. SocGen’s technical team notes that despite periods of optimism for the UK economy, the US Dollar’s role as the world reserve currency and safe haven maintains an outsized impact on the pair.
### Technical Picture: The Barrier at 1.3590
Technically, GBP/USD has tried to break higher several times, stalling at the crucial 1.3590 resistance level. As underscored by SocGen’s analysts, this level represents a confluence of:
– Previous swing highs
– Long-standing trendline resistance
– Fibonacci retracements from post-pandemic price movements
The inability to close above this mark signals underlying market caution and leaves the exchange rate prone to swift reversals. Bulls must decisively overcome this zone to open the path to fresh medium-term gains.
## SocGen’s 2025 View: Key Factors and Resistance
SocGen’s 2025 forecast is shaped by both technical thresholds and a forward-looking view of monetary policy differentials. The firm sees the 1.3590 resistance as pivotal, stating that GBP’s upside is “likely to remain challenged” unless a sustained break is seen.
### SocGen’s Core Forecast Drivers:
1. **Bank of England Policy Path**
– The BoE’s stance on interest rate hikes remains cautious.
– Any dovish tilt, especially if inflation pressures moderate, would likely keep the GBP capped against the USD.
– Persistent UK wage pressures or a hidden inflation resurgence could force the BoE’s hand, lending temporary support to Sterling.
2. **Federal Reserve’s Guidance**
– SocGen expects the Fed to maintain higher-for-longer policy settings through 2025 unless US data weakens materially.
– Given the “higher-for-longer” narrative in the US, the Dollar retains a supportive floor, especially as global risks persist.
3. **Relative Economic Trajectories**
– Comparisons in GDP, unemployment, and consumer data between the UK and US set the fundamental tone for GBP/USD.
– Any relative economic divergence, such as a faltering UK recovery or outperformance in the US, would maintain downtrends in the pair.
4. **Geopolitical and Risk Sentiment**
– Flight-to-safety flows regularly drive US Dollar demand.
– UK and European risks, such as political uncertainty or trade friction, can limit Sterling’s upside, reinforcing resistance zones.
5. **Technical Structure**
– The repeated failure at 1.3590 has invited selling pressure, increasing the importance for sterling bulls to drive a break-and-close above this level soon.
## Detailed Technical Analysis
SocGen’s chart analysis highlights several structural points that traders should monitor:
– **Support Levels:** Key support
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