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1.33 Taken Out, GBPUSD Eyeing New Cycle Highs
Forex
Technical Analysis
Summary:
FX desks are squarely in wait-and-see mode ahead of Friday's marquee U.S. inflation print. The September PCE deflator, the Fed's preferred gauge, is set to calibrate rate-expectation path and could be the catalyst for the next leg higher in cable.
Sell
TradingGBPUSD
EXP
1.33477
Entry Price
1.29000
TP
1.35000
SL
1.33312 +0.00041 +0.03%
0
Point
Flat
1.29000
TP
CLOSING
1.33477
Entry Price
1.35000
SL
Fundamentals
GBPUSD stormed to a five-week peak Thursday, delivering its largest one-day advance since April 2025. The move was fuelled by (i) an upward revision to high-frequency business-activity gauges, (ii) the dissipation of Budget-related tail-risk, and (iii) heightened market pricing that the FOMC will imminently embark on an easing cycle.
The Bloomberg Dollar Spot Index has declined for ten consecutive sessions. Should the skid extend it would mark the longest losing streak since the post-Bretton Woods float in 1971, further lubricating the upside in GBPUSD.
The proximate trigger was the final November S&P Global UK Composite PMI, which was revised materially higher from its flash estimate and spans both the services and manufacturing sectors, portraying a discernibly firmer growth trajectory. "The UK's economic backdrop is not as anaemic as initially feared," Danske Bank strategist Kirstine Kundby-Nielsen observed.
According to the final release from S&P Global on 3 December 2025, the UK Composite PMI for November was revised up by 0.7% to 51.2 from the 21 November flash estimate of 50.5. Although this remains below both the October final reading of 52.2 and the initial market consensus of 51.8, the index has now spent seven consecutive months above the 50.0 no-change mark, confirming that UK private-sector output continues to expand. The pace of growth, however, has eased compared with the previous month, pointing to a "modest expansion, solid resilience" regime.
At the sector level, the Services PMI was revised 0.8% higher to 51.3, beating the flash 50.5 and the market call of 51.0. The Manufacturing PMI was left unrevised at 50.2, still well ahead of the 49.3 consensus. The synchronized outperformance of the two core segments provided the main underpinning for the upward revision of the headline composite gauge.
Markets are increasingly pricing in a Fed rate cut next week, a move widely seen as pressuring the USD and lifting major pairs such as GBPUSD. According to CME's FedWatch tool, futures-implied odds for a 25 bp reduction at the December FOMC, taking the target range to 3.50%-3.75%, have surged to almost 87%, up from 63% a month ago.
The latest DOL release (week ending 29 Nov.) showed initial jobless claims fell 27,000 to 191 k after seasonal adjustment—the lowest print since Sep-2022 and well below the Reuters-consensus forecast of 220,000. Although the survey window included the Thanksgiving holiday, when filings can be volatile, the sub-200,000 reading is historically low and aligns with still-muted layoff announcements, easing fears of an abrupt labour-market unwind.
The upbeat print contrasts with Wednesday's ADP report, which revealed the sharpest drop in private payrolls in 2½ years. Continuing claims (week ended 22 Nov.) edged down to 1.939 m but remain elevated, consistent with the unemployment rate's climb from 4.3% in August to 4.4% in September.
Economists note that the labor market is currently in a "no-layoffs, no-hiring" stalemate. Key drivers include (i) a contraction in labor supply amid tighter immigration policy and (ii) downward pressure on demand for entry-level positions as AI adoption displaces routine tasks. Uncertainty stemming from the Trump administration's trade agenda is further damping hiring sentiment, particularly among small firms.
Technical Analysis
On the 4-hour chart, GBPUSD is grinding higher along EMA12, the MACD "angel-kiss" re-cross keeps bulls in charge, Bollinger bands angle up with price tipped to tag the upper band around 1.339. RSI 69, still constructive.
On the daily chart, after clearing the EMA200 and punching the upper Bollinger, the pair eyes the 1.35 platform high. MACD bullish crossover and move back above zero affirm follow-through, yet RSI 64 warns momentum may fade on the test.
Therefore, the advised trading strategy is to long-first/short-second into 1.35 resistance.
Trade Recommendations
Trade Direction: Sell
Entry Price: 1.336
Target Price: 1.29
Stop Loss: 1.35
Support: 1.3/1.29/1.28
Resistance Levels: 1.34/1.342/1.35
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