GBPUSD daily chart
A technically-driven move is undoing the pound on the first real trading day of 2025.
2024 wasn’t a great year for the pound but it mostly kept pace with the US dollar due to a hawkish stance at the Bank of England relative to other developed market central banks.
But it’s not exactly gangbusters for growth in the UK and today we’re seeing some heavy flow-driven moves out of the pound. Technicals are a big part of the equation with the break of the Nov-Dec lows near 1.2475 leading to stops and a rush to the exits.
At last look, we’re down 100 pips from that level, in part due to broad USD strength but it’s also a case of a particularly weak pound.
The 2024 intraday low as 1.2299 and that’s the main level of support now.
After US economic data, I think the most-important numbers in the world to watch are out of the UK as we will see some significant volatility on those numbers.