GBPUSD Consolidates, But Downside Potential Towards 1.2945 Remains High
Blue RiverThe GBPUSD pair remains under pressure as markets expect the Federal Reserve to keep interest rates unchanged in December, with the rate currently at 1.3027. Find out more in our analysis for 5 November 2025.
The GBPUSD pair remains under pressure as markets expect the Federal Reserve to keep interest rates unchanged in December, with the rate currently at 1.3027. Find out more in our analysis for 5 November 2025.
GBPUSD forecast: key trading points
- Fed officials signal caution regarding further monetary easing
- The likelihood of a 25-basis-point rate cut in December drops to 73.9% from 90% following the FOMC meeting
- GBPUSD forecast for 5 November 2025: 1.2945
Fundamental analysis
The GBPUSD rate is undergoing a correction after yesterday's sharp decline. The US dollar continues to strengthen as expectations fade for another Fed rate cut in December. Several Fed officials emphasised a cautious approach towards further policy easing.
Markets are now pricing in a 73.9% probability of a 25-basis-point rate cut next month, down from roughly 90% before last week's FOMC decision. Kansas City Fed President Jeffrey Schmid noted that another rate cut would likely have little impact on employment but could increase inflation risks.
Meanwhile, the US government shutdown continues, delaying key economic releases. Today's focus will be on the ADP private sector employment report as well as the manufacturing and services PMI data.
GBPUSD technical analysis
The GBPUSD rate is in a correction phase, remaining within a downward channel. After an aggressive selloff, sellers retain control, while recovery attempts are capped near the 1.3055 resistance level.
Today's GBPUSD forecast points to a potential resumption of the downward movement towards 1.2945. The Stochastic Oscillator further supports the bearish scenario, having exited oversold territory and signalling renewed downside momentum following a brief correction.
A consolidation below 1.3000 would reinforce the bearish outlook and increase pressure on the pound.
Summary
The current fundamental backdrop favours the US dollar. GBPUSD technical analysis suggests sustained bearish momentum, with a consolidation below 1.3000 signalling a decline towards 1.2945.
