GBP/USD Outlook: Pound Weakens Near 1.3360 as UK Housing Data Pressures Sterling

According to a report by Rightmove Group Ltd., average property values declined by 1.8% to £364.8 thousand. Analysts noted the sharpest drop in asking prices since 2024, as sellers rush to complete transactions ahead of the introduction of new tax rates. Sales of properties priced above £2.0 million—typically classified as mansions and subject to higher levies—fell by 13.0% year-on-year. Homes priced between £500,000 and £2.0 million, which fall under capital gains tax rules, saw sales decline by 8.0%. The least affected segment was properties below £500,000, where sales dropped by just 4.0%, as this category is expected to remain largely unaffected by the revised legislation.

As demand weakens, mortgage rates have fallen sharply and currently stand at 4.41%, well below the 5.06% recorded a year earlier. In addition, October GDP data showed a monthly contraction of 0.1% instead of the expected growth, while annual GDP slowed to 1.1% versus a forecast of 1.4%. Analysts point out that output in the services sector remained stable, but construction activity declined by 0.3% and manufacturing output fell by 0.5%, largely due to weakness in the automotive industry. Incoming data increases the likelihood of monetary policy easing by the Bank of England at its meeting on December 18.

The US dollar is attempting to extend its upward move this morning and is currently trading around 98.00 on the USDX index. Trading activity this week may be among the highest of the year, as combined US labour market data for October and November—previously delayed due to a government shutdown—will be released tomorrow at 15:30 (GMT+2). Markets will also focus on the US consumer price index report, which could confirm a continued gradual rise in inflation. Over the weekend, President Donald Trump added a new name to the list of potential successors to Federal Reserve Chair Jerome Powell, whose term ends next year. In addition to White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh is now also being considered.

Support and resistance levels

On the daily chart, the pair remains well above the lower boundary of a descending channel, with dynamic limits between 1.3560 and 1.3020.

Technical indicators are generating a buy signal: the fast EMAs of the Alligator indicator are positioned slightly above the signal line and continue to diverge, while the Awesome Oscillator histogram is forming rising bars in positive territory.

Resistance levels: 1.3430, 1.3650.

Support levels: 1.3290, 1.3060.

Trading scenarios and GBP/USD outlook

Long positions may be considered after a breakout and sustained move above 1.3430, with a target at 1.3650. Stop-loss: 1.3340. Time horizon: 7 days or more.

Short positions may be considered after a breakdown and consolidation below 1.3290, with a target at 1.3060. Stop-loss: 1.3360.