GBP/USD Forex Signal: 1.3600 in Focus Ahead of Major UK Economic Data
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The GBP/USD exchange rate has extended its bullish momentum, climbing to its highest level since October 7. After bottoming near 1.3000 in November, the pair has staged an impressive recovery, gaining almost 3% in a relatively short period. In this article, LFtrade brokers examine the key aspects of the topic with clarity.
This price action reflects a combination of shifting monetary policy expectations, improving risk sentiment, and anticipation of key macroeconomic releases from both the United Kingdom and the United States.
As long as the pair remains above critical technical support levels, the medium-term outlook continues to favor further upside, with traders increasingly focusing on the psychological resistance at 1.3600.
UK and US Macro Data in Focus
The latest leg higher in GBP/USD followed the final Federal Reserve policy decision of the year, which significantly reshaped interest rate expectations. The Federal Reserve surprised markets by delivering a 0.50% interest rate cut, bringing the benchmark federal funds rate down to a 3.50%–3.75% range.
In addition to the rate reduction, Fed officials announced the start of a new quantitative easing (QE) program, committing to purchase $40 billion worth of short-term US government bonds per month. Historically, QE policies increase dollar liquidity, expand the Fed’s balance sheet, and tend to weigh on the US dollar over time, a development that structurally supports GBP/USD upside.
US Inflation and Jobs Data: A Critical Test
Attention now turns to upcoming US macroeconomic data, which will play a decisive role in shaping Federal Reserve policy expectations for 2025. The Bureau of Labor Statistics (BLS) is scheduled to release both employment and inflation figures this week.
The October Non-Farm Payrolls report is expected to show that the US economy added just over 50,000 jobs, a sharp slowdown from the 112,000 jobs created in September. This decline is largely attributed to the recent government shutdown, which prevented several federal agencies from hiring and onboarding new staff.
Meanwhile, the US Consumer Price Index (CPI) report, due on Friday, will provide fresh insight into inflationary pressures. Together, these releases will help determine whether the Fed may deliver more than one rate cut in 2025, despite earlier guidance suggesting only a single cut.
UK Economic Data and Bank of England Expectations
On the UK side, the Office for National Statistics (ONS) will publish its latest labor market and inflation reports, both of which are key inputs for Bank of England (BoE) policy decisions.
According to economists polled by Reuters, headline UK CPI is expected to ease slightly from 3.6% in October to 3.5% in November. At the same time, core inflation, which strips out volatile food and energy prices, is forecast to remain steady at 3.4%.
Despite inflation remaining well above the BoE’s 2% target, markets increasingly expect the central bank to deliver a 0.25% interest rate cut at its next policy meeting. If incoming data confirms a gradual disinflation trend without a sharp deterioration in employment, the BoE may proceed cautiously, potentially limiting downside pressure on the British pound.
GBP/USD Technical Analysis
From a technical perspective, the daily chart paints a clearly bullish picture. The pair has surged from a November low near 1.3000 to a recent high around 1.3435, confirming a series of higher highs and higher lows.
Several technical indicators reinforce the positive bias, as price has decisively crossed above the 50-day moving average, signaling a shift in the medium-term trend. GBP/USD is trading above the Ichimoku Cloud, a classic indication of a bullish market structure.
The Relative Strength Index (RSI) continues to trend higher without entering overbought territory, suggesting strong yet sustainable momentum. Meanwhile, the MACD indicator remains in positive territory, with expanding histogram bars pointing to accelerating upside pressure.
Additionally, the pair is approaching a key pivot reversal level derived from the Murrey Math Lines tool, often associated with continuation moves when broken decisively.
Outlook and Key Levels to Watch
Given the alignment of fundamental catalysts and technical indicators, the GBP/USD pair appears well-positioned to extend its rally in the near term. Bulls are likely to target the 1.3600 psychological level, which represents both a round-number resistance and a potential trend acceleration point.
However, risk management remains crucial. A daily close below 1.3200 would signal a loss of bullish momentum and invalidate the current upside scenario, opening the door for a deeper corrective move.
Conclusion
In summary, GBP/USD remains supported by Fed easing, quantitative easing liquidity, and constructive technical signals, while upcoming UK and US macroeconomic data will act as the next major catalysts. As long as price action holds above key support zones, the path of least resistance continues to point higher, with 1.3600 firmly in focus.