GBPUSD consolidates as bulls eye 1.30

• GBPUSD ↑ 3% month-to-date
• UK data + possible US government shutdown = volatility?
• 2025: 2 BoE cuts expected, potentially 3 Fed cuts expected  
• Over past year UK GDP MoM triggered moves of ↑ 0.1% & ↓ 0.6%
• Technical levels: 1.3000, 1.2950, 1.2870

A tug-of-war broke out between the pound and dollar on Thursday as prices wobbled near a four-month high. 

Despite edging closer to the psychological $1.30, prices slipped mid-session – erasing the weekly gains. Nevertheless, a cautious BoE coupled with dollar weakness could limit losses on the GBPUSD - keeping bulls in a position of power. 

Looking ahead, investors will direct their attention toward the upcoming UK GDP and Industrial production data due on Friday 14^th March. 

Market forecasts: 

• UK GDP (MoM): 0.1% expected versus 0.4% in previous reading 

Over the past 12 months, the UK GDP (MoM) has triggered upside moves of as much as 0.1% or declines of 0.6% in a 6-hour window post-release.

• UK industrial production (Mom): -0.1% expected versus 0.5% in prior reading

Over the past 12 months, the UK industrial production has triggered upside moves of as much as 0.1% or declines of 0.6% in a 6-hour window post-release.

Ultimately if the data disappoints, this could hit confidence toward the UK economy and boost BoE cut bets – leading to a weaker pound. The same can be said vice versa. 

On the other side of the Atlantic…

The US federal government approaches a potential shutdown tomorrow, Friday March 14^th.

This uncertainty and political instability could further dampen sentiment toward the US economy, resulting in a weaker dollar. 

• If a shutdown becomes a reality, economic disruptions and political risk could drag the dollar lower – pushing the GBPUSD higher. 
• Should a shutdown be averted, this may boost the dollar – dragging the GBPUSD lower. 

Technical forces 

Prices remain in a bullish channel on the daily charts, trading above the 21, 50, 100 and 200-day SMA. However, the Relative Strength Index (RSI) signals that prices are heavily overbought.

• A move back above 1.2950 may push prices toward 1.3000 and the upper limit of Bloomberg’s FX model at 1.3079. 
• Should prices slip below 1.2870, this may trigger a decline toward the 200-day SMA at 1.2790 and 1.2772 – the lower bound of the Bloomberg FX model.

Bloomberg’s FX model forecasts a 75% chance that GBPUSD will trade within the 1.2772 – 1.3079 range, using current levels as a base, over the next one-week period.