GBPUSD: the pair reversed upwards, securing above 1.2300

The GBPUSD rate has established a local low on the price chart and is rising within an upward correction this week. Find out more in our analysis for 22 January 2025.

GBPUSD forecast: key trading points

• UK wages rose by 5.6% year-on-year
• The unemployment rate increased to 4.4% between September and November 2024
• Current trend: an upward correction
• GBPUSD forecast for 22 January 2025: 1.2300 and 1.2500

Fundamental analysis

UK earnings statistics showed a 5.6% year-on-year rise between September and November 2024, marking the highest level in the past six months. This compares to a 5.2% increase in the previous period, with the private sector driving the largest wage gains.

Meanwhile, the unemployment rate rose to 4.4% during the same period, up from the previous 4.3%. Last week’s data also pointed to easing inflation and weaker-than-expected economic growth. Against this backdrop, market participants anticipate the Bank of England will reduce the key interest rate by 25 basis points to 4.5% at next month’s meeting.

GBPUSD technical analysis

On the H4 chart, the GBPUSD pair is experiencing an upward correction after rebounding from the 1.2100-1.2140 support area, with the Alligator indicator pointing to growth. The daily trend remains downward, suggesting the price could continue to decline once the current correction is complete.

The short-term GBPUSD forecast suggests the pair could rise to the 1.2500 resistance level if the bulls hold the price above the 1.2300 support level. Conversely, a further decline is likely if the bears regain control below the 1.2300 level again, targeting the 1.2100-1.2140 support area.

Summary

The GBPUSD pair has risen above 1.2300 within the current upward correction. The bulls currently hold the initiative, and local growth will likely continue.