The GBP/USD pair remains in a tight range, with traders hesitant to make bold moves ahead of key economic data and central bank signals. The British pound has struggled to find momentum, as mixed economic indicators and global market uncertainty keep investors cautious.
Despite a slight recovery, the US dollar’s resilience continues to cap gains for the pound. Expectations of a higher-for-longer Federal Reserve policy stance have kept the greenback supported, making it difficult for GBP/USD to stage a decisive breakout. The market remains focused on upcoming US economic releases, which could influence rate expectations and drive volatility.
GBP/USD 4-H Chart as of February 20th, 2025 (Source: TradingView)
On the UK side, the Bank of England’s policy outlook remains uncertain, adding to the pound’s lack of direction. While inflation has eased from its peak, concerns over economic slowdown persist, leaving investors questioning whether the BoE will maintain its cautious approach or signal a shift in its monetary stance. Until policymakers provide clearer guidance, GBP/USD is likely to stay range-bound.
Technical analysts highlight key levels around 1.2600 and 1.2700, with traders watching for a breakout in either direction. A strong push above resistance could signal renewed bullish momentum, while a drop below recent support levels might expose the pound to further downside pressure.
Broader market sentiment is also a factor, with global risk appetite and geopolitical developments influencing forex flows. Any shift in investor confidence could trigger sharp moves, making GBP/USD particularly sensitive to unexpected headlines.
For now, GBP/USD remains in a wait-and-see mode, with traders looking for catalysts to determine its next major move. Until economic data or central bank signals provide clearer direction, the pair is likely to stay within its current trading range.
