GBP/USD Forecast: Pound Recovers as Markets Await Fed News

Forex traders and investors are focused on the minutes of the Bank of England’s September 18 meeting, where the interest rate was kept at 4.00%. Seven out of nine members of the Financial Policy Committee supported maintaining the rate, while two voted for a 25-basis-point cut. The regulator once again highlighted rising financial risks heading into 2025, expressing concerns about escalating tensions on global trading platforms due to newly imposed restrictions by various countries.

Officials also noted the rapid rise in prices for many high-risk assets, particularly shares of technology companies heavily involved in artificial intelligence (AI) and generative models. These developments are already affecting the labor market, as many corporations aim to replace parts of their workforce with such systems. Overall, the published minutes had little impact on market expectations regarding the Bank of England’s upcoming meeting scheduled for December 18. Around 90% of analysts are confident that the regulator will cut the rate by 25 basis points, following the Federal Reserve, whose decision will be announced on December 10.

Macroeconomic data released on Tuesday showed a slowdown in the UK’s annual house price index from Nationwide Building Society — from 2.4% to 1.8% in November, compared with the forecast of 1.4%. On a monthly basis, the index accelerated from 0.2% to 0.3%, against preliminary expectations of 0.0%. Today at 11:30 (GMT+2), investors will focus on UK services PMI for November, which is expected to remain around 50.5 points. At 16:45 (GMT+2), similar data from the US will be released, where no change from the 55.0 level is anticipated. In addition, at 15:15 (GMT+2), the ADP private employment report will be published, with analysts forecasting a 5,000 increase after a 42,000 rise in the previous month.

Meanwhile, the Bank of England has lowered Tier 1 capital requirements for major UK lenders for the first time in nearly two decades — from 14.0% to roughly 13.0% of risk-weighted assets. The decision follows an assessment of the resilience of the country’s largest banks, which demonstrated the ability to withstand severe economic downturns, interest-rate shocks and external stress scenarios while maintaining substantial buffers above regulatory minimums.

The new rules, taking effect in 2027, aim to support lending to households and businesses. However, financial institutions are not obligated to direct the freed-up capital specifically toward credit expansion, leaving room for increased dividend payouts or share buybacks. At the same time, the regulator is revising capital-buffer usage and leverage-ratio rules, which may ease regulatory oversight. The Financial Policy Committee considers the new threshold adequate for maintaining financial stability amid changes in banks’ balance-sheet structure.

Support and Resistance Levels

Bollinger Bands on the daily chart show moderate upward movement: the price range is widening, giving bulls room to push toward new local highs. MACD is rising, maintaining a strong buy signal (the histogram remains above the signal line). The indicator is also attempting to consolidate above the zero level. Stochastic, on the other hand, continues to move downward and has not yet responded to the pound’s attempts to strengthen. Traders should wait for clearer signals from the oscillator.

Resistance levels: 1.3250, 1.3300, 1.3350, 1.3413.

Support levels: 1.3200, 1.3179, 1.3150, 1.3100.

Trading Scenarios and GBP/USD Forecast

Long positions may be opened after a confident breakout above 1.3250, targeting 1.3350. Stop-loss: 1.3200. Implementation horizon: 1–2 days.

A bounce from 1.3250 as resistance followed by a breakdown below 1.3200 may signal the opening of new short positions with a target at 1.3100. Stop-loss: 1.3250.