GBP/USD starts the week of Monday, December 15, 2025 in a familiar place: caught between a Pound that has found support recently and a US Dollar that’s trying to decide whether the latest soft patch is a temporary dip or the beginning of something bigger.
Over the past couple of weeks, Sterling has been steadier than many expected, helped by calmer market reaction after the UK Budget and an improved tone in UK activity data. Reuters+1
At the same time, the US Dollar has been dealing with shifting interest-rate expectations following the Federal Reserve’s December 10, 2025 rate cut, and the market is now intensely sensitive to whether US data confirms a “slowdown without a crash” narrative—or challenges it. Federal Reserve+1
This week, the macro calendar is busy enough to shake GBP/USD out of its recent ranges. The two biggest UK events are:
- UK CPI (November 2025) — Wednesday, December 17, 2025
- Bank of England policy decision — Thursday, December 18, 2025
And from the global side, the week is packed with major risk events (including other central bank decisions) that can influence the “risk-on / risk-off” mood and, by extension, the USD side of the pair.
Below is a practical, trader-friendly way to think about GBP/USD for the week—without pretending anyone can predict a single outcome with certainty.
1) The fundamental setup: rate expectations are the main lever
The UK side: a likely cut, but the details matter more than the headline
By Monday, expectations were heavily leaning toward a Bank of England cut this week—often framed as a move from 4.0% to 3.75%—but the bigger story is the tone and the vote split.
A close vote (for example, something like 5–4) signals a divided committee and can make the market interpret the cut as “cautious insurance” rather than the start of a rapid easing cycle. That distinction matters because GBP/USD is extremely sensitive to how traders price the next 2–4 meetings, not just this one.
What would Sterling bulls want to see?
- Inflation clearly easing (or at least not re-accelerating)
- A cut that’s framed as measured, not panicked
- Guidance that doesn’t scream “multiple cuts are coming fast”
What would Sterling bears focus on?
- A cut plus language leaning dovish
- Emphasis on growth weakness and labour market cooling
- Any hint the BoE is worried it’s behind the curve on easing
The US side: “can the USD make a comeback?”
The US Dollar’s question this week is whether it can regain traction after the Fed’s Dec 10 move and the market’s subsequent repricing.
One reason the USD remains hard to trade cleanly is that the Fed is trying to thread a needle: bring inflation down without breaking employment. New York Fed President John Williams, for example, has talked about policy being in a “good position” and expects inflation to moderate over time—language that can be interpreted as “steady, not rushing.”
That leaves GBP/USD driven by a tug-of-war:
- If the market believes the Fed can stay relatively firm (or not ease as aggressively as expected), USD can bounce.
- If the market believes disinflation + cooling growth forces more easing, USD can struggle.
2) The week’s catalysts: where volatility can spike
Wednesday: UK CPI (Nov) — the pre-BoE “set the tone” release
UK CPI is due Wednesday, December 17
In a week with a central bank decision, inflation prints often act like a “vote influencer” for how traders price the announcement before it arrives.
- A softer CPI print can reinforce expectations for a cut and potentially more easing later.
- A hotter-than-expected CPI can complicate the cut narrative (even if a cut still happens), potentially supporting GBP in the very short term.
Thursday: BoE decision — headline + minutes + vote split
The BoE’s December policy materials are scheduled for Thursday, December 18
Reuters reporting suggests the decision could be closely contested, which increases the chance of “two-way” price action: an initial knee-jerk move, followed by reversal once the market reads the vote split and language.
Also this week: big global events can pull USD even if UK data is quiet
Even if you’re focused on GBP, remember: USD often moves on broader risk sentiment and global policy signals. Calendars for this week highlight that central bank activity and major releases are clustered together.
3) Scenario map: 3 realistic paths for GBP/USD
Scenario A: GBP strength extends (GBP/USD pushes higher)
This scenario fits if UK CPI doesn’t surprise to the upside too much, and the BoE cut is framed as “measured” with a less-dovish tone than feared.
In that case, GBP/USD can grind upward—especially if the US data flow doesn’t offer the USD an obvious reason to rally.
Scenario B: USD rebound (GBP/USD fades / pulls back)
This scenario fits if US rates expectations shift even slightly back toward “higher for longer,” or if the market reads the BoE as opening the door to a faster easing cycle. Reuters+1
A USD rebound doesn’t require “amazing” US data—sometimes it only takes data that’s “not weak enough” to justify aggressive easing bets.
Scenario C: Whipsaw week (range with sharp spikes)
This might be the most common outcome in heavy-event weeks: GBP/USD swings around key levels as traders reposition into CPI, then into the BoE, then into end-of-year liquidity conditions.
4) Technical levels traders are watching
Multiple technical commentaries this week highlighted ~1.34 as an important resistance area—where rallies have struggled to push through cleanly. DailyForex
On the downside, some near-term support zones being referenced include the low/mid-1.33s and the ~1.3280–1.3300 region, which has been discussed as an area buyers may defend in the short run.
A clean way to think about it:
- Above resistance (~1.34): bullish extension risk (but watch for “false breakouts” during news)
- Below support (~1.33 / ~1.3280): pullback risk increases, especially if USD catches a bid
(Exact levels vary by feed/broker—treat them as zones, not single-price “magic numbers.”)
5) Practical trading notes for this week (especially if you run EAs)
Whether you trade manually or run an Expert Advisor, the most important “edge” during big macro weeks is often risk control, not prediction.
A few sensible approaches:
- Avoid oversized positions into UK CPI and the BoE. Spread widening and slippage risk tend to rise around those windows.
- Decide in advance whether your strategy is a “news trader” or a “post-news trader.” If your edge is trend continuation, often the cleaner entry is after the first spike settles.
- For EAs: consider reducing risk presets, tightening max-trade limits, or pausing new entries around scheduled high-impact events—especially if the EA wasn’t designed for volatility bursts.
This isn’t about being “scared of news”—it’s about recognizing that market microstructure changes during major releases. Liquidity can thin, and execution quality becomes part of the outcome.
Bottom line
GBP/USD this week is less about a single chart pattern and more about policy expectations colliding:
- UK CPI on Dec 17 can shape the pre-BoE narrative.
- The BoE decision on Dec 18 is expected to be tight and headline-sensitive.
- The USD side remains driven by whether the market believes the Fed is now firmly on an easing path after Dec 10, or whether the “USD comeback” story still has room.
