Cable’s Next Move: Bullish Recovery or Further Decline?
Last week brought some notable economic data releases, shaping market sentiment for GBP/USD (Cable).
Bank of England Rate Cut
The Bank of England (BoE) lowered interest rates by 25 basis points from 4.75% to 4.50%, in line with expectations. According to Trading Economics, the BoE maintained its stance that monetary easing will be gradual as policymakers balance slowing growth with persistent services inflation.
US Jobs Data & Dollar Strength
In the US, January’s Non-Farm Payrolls (NFP) came in at 143K, well below the revised 307K in December and missing forecasts of 170K. Meanwhile, the unemployment rate dipped to 4.0%, its lowest since May, slightly below the expected 4.1%.
GBP/USD Price Action – Who’s in Control?
Cable has been in a fascinating bull-bear battle over the past year.
On 1st September 2024, GBP/USD broke the previous year’s high at 1.31418, surging to 1.34341 after nearly a year-long bullish run (from 1.20370 in October 2023).
However, October 2024 marked a turning point, with the dollar gaining strength, sending GBP/USD into a four-month decline from 1.34341 to 1.20991.
Now, on 12th February 2025, price action suggests buyers are stepping in at the key demand zone (1.20991 – 1.20146). After rejecting this area, Cable is currently trading at 1.22988, a level where bullish interest seems to be building.
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Key Levels to Watch
If this month’s candlestick closes bullish, Cable could rally to 1.28932, a zone that previously saw strong selling pressure.
Further bullish momentum could take GBP/USD to the supply zone between 1.31418 – 1.33768, a critical area where sellers may return.
If 1.22988 fails as support, sellers may push price back to the demand zone (1.20991 – 1.20146).
A break below 1.20370 would signal a potential continuation of the downtrend, opening the door to fresh lows.
Final Thoughts:
Right now, GBP/USD is stuck in an interesting range between 1.22988 – 1.24867. A break above 1.24867 could fuel a rally towards 1.28932, while a close below 1.22988 could see sellers retest the demand zone.
As always, timing these moves is the tricky part—market dynamics will dictate the pace. Keep an eye on upcoming economic data and central bank rhetoric, as they will likely influence GBP/USD’s next big move.