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16.12.2025 05:23 AM
The GBP/USD currency pair traded quite calmly throughout Monday, and calm movements for the pound this week would be the best possible scenario. It is worth noting that the Bank of England is very likely to lower the key interest rate this week, which is a "bearish" factor. We still believe that the pound will not face any significant problems in this regard, as the US dollar rose in October and November without any clear grounds. Thus, we maintain the view that the global upward trend remains intact, indicating that the pound will continue to rise. However, it cannot be denied that this week holds many sharp turns for the British currency, just as it does for the US dollar.
The British currency will start to face challenges as early as today. In the morning, reports on unemployment, wages, and unemployment claims will be released. However, we would like to remind you that the British macroeconomic background is not as important to the market as the American one. What does this mean? If the US unemployment rate increases by 0.1%, it will elicit a stronger market reaction than a similar unemployment report from the UK. Therefore, at first glance, there is no special danger for the British pound today. Experts forecast unemployment rising to 5.1%, so the market is already prepared for this level, and a sharply negative reaction would only be possible if the figure rose to 5.2% or higher.
Additionally, business activity indices will be released in the UK today, which may prompt a market reaction only if there is a significant deviation from forecast values. In any case, even weak indices should not trigger a collapse of the British currency. However, after lunch, the US dollar will face challenges.
It is currently impossible to predict what the November Non-Farm Payroll report will reveal. One could speculate, of course, but few are likely to hit the mark. Everything is quite straightforward here. The better the report is relative to forecasts, the stronger the dollar will rise. In this case, the market reaction could be significant. If the actual figure is weaker than forecasted, that will be just what is needed for the GBP/USD pair to continue its rise according to the current technical picture.
It is also important to highlight that the unemployment report carries the same weight as the Non-Farm Payrolls. However, a poor Non-Farm figure does not guarantee a similar result in the unemployment report. These reports may even contradict each other, which complicates life for traders. Some experts believe that the unemployment rate could rise to 4.6%, which would be a severe failure, sending the dollar into freefall. But we must not forget that forecasts are just forecasts, and no one is accountable for them. Therefore, today is certainly set to be an exciting day.
The average volatility of the GBP/USD pair over the last five trading days is 70 pips. For the pound/dollar pair, this value is considered "average." Thus, on Tuesday, December 16, we expect movements within the range bound by levels 1.3309 and 1.3449. The upper linear regression channel is downward-sloping, but only due to a technical correction on the higher timeframes. The CCI indicator has entered the oversold area six times in the past months and has formed several "bullish" divergences, constantly warning of a resumption of the upward trend. Last week, the indicator formed another bullish divergence, but the week ended with two entries into the overbought area and a "bearish" divergence. Conclusion: a correction within an upward trend.
The GBP/USD currency pair is attempting to resume its upward trend for 2025, and its long-term prospects have not changed. Donald Trump's policies will continue to exert pressure on the dollar, so we do not expect the US currency to rise. Therefore, long positions with targets at 1.3489 and 1.3550 remain relevant for the near term while the price is above the moving average. If the price is below the moving average line, small short positions can be considered with targets at 1.3306 and 1.3245 on technical grounds. Occasionally, the US currency shows corrections (on a global scale), but for a trend-based strengthening, it requires signs of a resolution to the trade war or other positive global factors.
