GBPUSD: the pair may continue to decline after completing a correction

The actual UK and US CPI data and the speeches of FOMC members may impact the GBP’s strength. Discover more in our analysis for 15 January 2025.

GBPUSD forecast: key trading points

• The UK CPI for December: previously at 2.6%, projected at 2.6%
• The US CPI for December: previously at 0.3%, projected at 0.4%
• FOMC member Jeffrey Schmid will deliver a speech
• FOMC member John C. Williams will deliver a speech
• GBPUSD forecast for 15 January 2025: 1.2290 and 1.2100

Fundamental analysis

The UK CPI reflects changes in consumer prices of goods and services, helping assess changes in buying trends and economic stagnation. A higher-than-forecast reading typically has a positive effect on the national currency.

The forecast for 15 January 2025 suggests that the December 2024 CPI could remain unchanged from the previous reading of 2.6%; the projected reading may also be 2.6%.

Fundamental analysis for 15 January 2025 shows that if the UK CPI remains flat compared to the previous period, this may add to positive factors for the British pound.

The US CPI could rise to 0.4% in December 2024 from the previous reading of 0.3%. The index’s positive dynamics add optimism to the US dollar, which, in turn, may have a downward impact on the GBPUSD rate.

Federal Reserve Bank of New York President and FOMC member John C. Williams is expected to deliver a speech today, 15 January 2025. Given his earlier statements, he will likely discuss the current economic situation, inflation trends, and possible directions of the Federal Reserve’s monetary policy.

Based on his previous speeches, today, Williams will likely focus on:

• Assessing current US economic conditions and their resilience to external and domestic challenges
• Analysing inflation indicators and their compliance with the target level of 2%
• Justifying the Federal Reserve’s further interest rate actions based on the recent economic data and forecasts

GBPUSD technical analysis

Having tested the lower Bollinger band, the price has formed a Harami reversal pattern on the GBPUSD H4 chart. At this stage, a corrective wave is forming following the received signal. Since the quotes remain within a descending channel and given the upcoming release of US and UK fundamental data, a corrective wave is expected to develop to 1.2290, with the quotes rebounding and maintaining their downward trajectory.

The downside target is currently the 1.2100 support level. A breakout below this level will open the potential for a more substantial downtrend.

However, an alternative scenario is possible: the price could fall to 1.2100 before continuing its downward momentum without testing the resistance level.

Summary

Alongside the GBPUSD technical analysis, the current US and UK CPI data may trigger a continued corrective wave to 1.2290 before a decline.