GBP/USD remains near recent highs as traders await Wednesday’s Spring Statement from Chancellor Rachel Reeves. While major tax changes are off the table, revisions to the UK’s economic outlook and fiscal plans could provide fresh direction for the pound.
What to Watch in the Spring Statement
The key focus will be the Office for Budget Responsibility’s updated growth forecasts. Last year, the OBR had pencilled in 2% GDP growth for 2025, but weaker-than-expected data suggests that figure is due for a downgrade. Some estimates suggest it could be halved to around 1%.
Meanwhile, higher interest rates have pushed up government debt servicing costs by an estimated £10bn per year, eroding the fiscal headroom Reeves had in October. With the chancellor prioritising stability, the government is expected to balance the books through welfare cuts and slightly tighter departmental spending rather than introducing new tax measures. For markets, that means a relatively muted fiscal event—but in an environment where the pound has been grinding higher, even subtle shifts in the outlook could be enough to move the dial.
A Breakout, Then a Breather
Sterling’s technical picture has changed significantly since the start of the year. After breaking above a long-term descending trendline in late January, GBP/USD has carved out a steepening series of higher swing lows, forming an ascending trendline fan. This structure signals increasing bullish momentum, but in recent weeks, the pair has entered a consolidation phase—pulling back slightly while holding near trend highs. At the same time, trading volume has steadily declined, dipping below its 20-day average.
GBP/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
On the hourly chart, this consolidation is even more defined. GBP/USD has established a clear range with horizontal support and resistance levels, offering traders well-structured reference points for reversals or breakouts, especially with Wednesday’s Spring Statement acting as a potential catalyst. At present, prices are languishing near the lower boundary of this range, but the RSI is not in oversold territory. However, if RSI does dip into oversold conditions and the hourly chart forms a bullish reversal pattern at the bottom of the range—an area that aligns with the ascending trendline fan on the daily chart—it would present a compelling buy signal within the broader uptrend.
GBP/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
What to Watch in the Spring Statement
The key focus will be the Office for Budget Responsibility’s updated growth forecasts. Last year, the OBR had pencilled in 2% GDP growth for 2025, but weaker-than-expected data suggests that figure is due for a downgrade. Some estimates suggest it could be halved to around 1%.
Meanwhile, higher interest rates have pushed up government debt servicing costs by an estimated £10bn per year, eroding the fiscal headroom Reeves had in October. With the chancellor prioritising stability, the government is expected to balance the books through welfare cuts and slightly tighter departmental spending rather than introducing new tax measures. For markets, that means a relatively muted fiscal event—but in an environment where the pound has been grinding higher, even subtle shifts in the outlook could be enough to move the dial.
A Breakout, Then a Breather
Sterling’s technical picture has changed significantly since the start of the year. After breaking above a long-term descending trendline in late January, GBP/USD has carved out a steepening series of higher swing lows, forming an ascending trendline fan. This structure signals increasing bullish momentum, but in recent weeks, the pair has entered a consolidation phase—pulling back slightly while holding near trend highs. At the same time, trading volume has steadily declined, dipping below its 20-day average.
GBP/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
On the hourly chart, this consolidation is even more defined. GBP/USD has established a clear range with horizontal support and resistance levels, offering traders well-structured reference points for reversals or breakouts, especially with Wednesday’s Spring Statement acting as a potential catalyst. At present, prices are languishing near the lower boundary of this range, but the RSI is not in oversold territory. However, if RSI does dip into oversold conditions and the hourly chart forms a bullish reversal pattern at the bottom of the range—an area that aligns with the ascending trendline fan on the daily chart—it would present a compelling buy signal within the broader uptrend.
GBP/USD Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.