Why Is GBP/USD Hovering Near 1.24? Key US Economic Data Holds the Answer

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• GBP/USD shows limited movement post-Fed decision,USDT wallet app download testing support levels.

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• Market attention shifts to upcoming US GDP and inflation data releases.

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• Technical indicators suggest the currency pair remains in consolidation mode.

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The GBP/USD currency pair exhibited minimal volatility during Wednesday's trading session, briefly touching the 1.2400 level after the Federal Reserve maintained its current interest rate policy. Market participants had largely anticipated this decision, with the central bank indicating no immediate urgency to implement further monetary easing measures. The coming days will provide critical economic indicators that could validate or challenge the Fed's current stance.

Thursday's release of US fourth-quarter Gross Domestic Product figures will offer fresh insights into economic growth patterns. Consensus estimates suggest a moderation in annualized GDP expansion to 2.6%, down from the previous quarter's 3.1% reading. Simultaneously, inflationary pressures continue to command attention, with projections indicating the GDP Price Index may rise to 2.5% from its prior 1.9% level.

Friday's market focus will center on the Core Personal Consumption Expenditures Price Index, a key inflation metric closely monitored by Federal Reserve policymakers. December's monthly PCEPI reading is forecast to show a modest increase to 0.2% month-over-month, while the annualized figure is expected to remain steady at 2.8% year-over-year. These persistently elevated inflation levels continue to complicate expectations for potential rate adjustments in the near term.

Federal Reserve Chair Jerome Powell emphasized the central bank's commitment to data-driven policy decisions during Wednesday's announcement. While acknowledging the potential impact of new presidential administration policies on economic conditions, Powell clarified that the Fed maintains its operational independence from executive branch influence. The central bank's cautious approach reflects ongoing concerns about inflation trends and broader economic uncertainties.

Market participants have adjusted their expectations regarding potential rate cuts in 2025, with current pricing suggesting no changes to the federal funds rate until at least June. This recalibration reflects the Fed's patient stance and recognition of persistent inflationary pressures within the economy.

Technical Perspective on GBP/USD

The currency pair continues to trade within a constrained range, positioned slightly below the 50-day Exponential Moving Average near 1.2500 while finding consistent support around the 1.2400 level. Recent price action suggests exhaustion of the previous upward correction, though significant downward momentum has yet to materialize. Market technicians observe that the pair remains in a consolidation phase, awaiting clearer directional signals from fundamental developments.

Market Implications and Forward Outlook

Traders and analysts alike anticipate that the upcoming economic data releases could provide the catalyst needed for GBP/USD to break from its current trading range. The combination of growth metrics and inflation readings will offer valuable insights into the US economic trajectory, potentially influencing Federal Reserve policy expectations and, consequently, dollar valuation. Market participants remain attentive to these developments as they assess the currency pair's near-term direction.