GBP/USD Rallies Ahead of UK GDP. Will Multi-Week Resistance Hold?

[Redator]

GBPUSD rallied after US CPI data all but confirmed a rate cut next week. At least that is the view of market participants who actually priced in as much as 75 bps of cuts through December 2025, according to futures pricing.

For more on the US CPI release, please read A hesistant FX Market after the as-expected September CPI release – Technical levels

US data had been the talking point heading into the week, and now with CPI and PPI behind us focus may begin to turn to UK GDP data due out tomorrow.

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UK Economy and GDP Data

The UK economy is at a critical point. A new report on the country's Gross Domestic Product (GDP) is expected to reveal more about its health.

Experts predict that the UK's economy didn't grow at all in July after a surprisingly strong 0.4% increase in June. While the economy grew by 0.3% in the second quarter of the year, this was slower than the 0.7% growth in the first quarter. One reason for the earlier growth was that businesses were preparing for new US taxes and tariffs, an effect that is not expected to continue.

The UK economy appears to be stuck in a "low-growth trap," meaning it's growing very slowly. Although the forecast for growth in 2025 has been slightly increased from 1.1% to 1.3%, this is still considered very weak.

In response to the economic situation, the Bank of England (BoE) recently lowered its main interest rate to 4%. However, it plans to make only two more small cuts by the end of 2026. This cautious approach is because the BoE is still worried about inflation, which is the rate at which prices are rising. They expect inflation to reach a high of 3.7% this year.

If the upcoming GDP numbers are surprisingly strong, this cautious approach by the BoE could actually make the British Pound stronger against other currencies.

Now the consequences of this may come in the form of rate differentials in the months ahead. If the BoE decides to stop cutting rates and the Fed starts with rate cuts, this could leave GBPUSD poised to rise even further.

Technical Analysis - GBP/USD

From a technical point of view, GBP/USD rallied today and ran into a key resistance level which has held firm over the last month.

The resistance level at 1.3584 has been tested two or three times over the past month but has thus far held firm.

Today's hammer candlestick close hints at further upside. Immediate resistance rests at 1.3680 before the YTD high at 1.3788 comes into focus.

Looking at the possibility of a move lower, immediate support rests at the 1.3500 handle before the 1.3378 handle becomes an area of focus.

GBP/USD Daily Chart, September 12, 2025

Source:TradingView

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