**GBP/USD Shows More Negative Signs – Analysis (Credit: Economies.com, 10/06/2025)**
The Forex market continues to contend with heightened uncertainty, volatility, and mixed fundamental signals as major pairs react sharply to economic data and central bank guidance. The GBP/USD currency pair, which tracks the British Pound relative to the US Dollar, is especially sensitive to these factors and has recently shown increased bearish tendencies, suggesting the possibility for further downside moves.
This article analyzes the recent price action, technical indicators, and relevant fundamentals affecting GBP/USD. The insights and data are drawn from, and credit is given to, the detailed analysis originally published by Economies.com on October 6, 2025.
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**Technical Analysis of GBP/USD Price Action**
The GBP/USD pair began the week with an extension of its near-term downward trend, as sellers regained control after a period of sideways consolidation. Several technical factors point toward the continuation of bearish momentum in the coming sessions.
**Key Technical Observations:**
– The pair recently broke below the 1.2150 support level, reinforcing seller dominance and nullifying previous attempts at a bullish correction.
– Daily candlestick structure remains characterized by lower highs and lower lows, a classic indicator of a sustained bearish trend.
– The 50-day Exponential Moving Average (EMA) is sloping downwards and currently acting as dynamic resistance, pushing the pair lower whenever it attempts to rally.
– The Relative Strength Index (RSI) on the daily chart is trending below 50, supporting the case for prevailing bearish sentiment among traders.
– There is currently no sign of a sharp oversold condition, suggesting that the downside may continue before any meaningful technical rebound.
– Price action is holding below a declining short-term resistance trendline (drawn from the 1.2350 peak in late September), reinforcing the negative technical picture.
**Critical Support and Resistance Levels:**
– Immediate support is identified at 1.2100, a psychological and technical barrier that previously provided a platform for minor rebounds.
– Should the pair break below 1.2100, the next significant support is at 1.2020. A sustained move beneath this region would open the door toward 1.1950, a level not seen since March 2023.
– On the upside, resistance is established near 1.2200, followed by the 50-day EMA, currently around 1.2270. Only a close above this area would signal a reversal of the prevailing bearish bias.
These technical elements combine to suggest that selling pressure is likely to intensify unless a strong catalyst prompts a sharp retracement.
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**Fundamental Factors Impacting GBP/USD**
Fundamental drivers contributing to GBP/USD’s weak performance in early October 2025 stem from differing economic outlooks between the UK and US, as well as the ongoing expectations regarding monetary policy.
**Key Fundamental Themes:**
1. **Divergence in Monetary Policy Outlook**
– The US Federal Reserve has remained hawkish in its communications, maintaining that inflation risks require a higher-for-longer rate regime. Although recent US data has shown some softening in the labor market and consumer spending, the Fed’s caution prevents markets from pricing in imminent rate cuts.
– In contrast, the Bank of England (BoE) faces mounting pressure from weak UK economic data and slowing inflation. The central bank is expected to pause or even begin easing in the coming quarters, which is bearish for the Pound.
– The interest rate differential between the two countries continues to weigh on GBP/USD, motivating capital flows into US Dollar-denominated assets.
2. **Economic Indicators and Growth Concerns**
– The latest UK Services and Manufacturing PMI surveys remain below the 50 level, underlining contraction in business activity and adding to fears of an economic recession.
– UK GDP growth projections have been downgraded to nearly zero for the coming quarters, reflecting challenges from weak consumer demand and persistent post-B
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