GBP/USD Forecast: Pound Sterling Rally Stalls as "Momentum is Overbought"

April 22, 2025 - Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling Rally Stalls as "Momentum is Overbought"

The Pound Sterling's recent rally against the US Dollar takes a break on Tuesday, with GBPUSD trading flat at around 1.337.

"GBPUSD looks to be taking a pause following its impressive 10-session rally from 1.2700," says Shaun Osborne, Chief FX Strategist Momentum at Scotiabank.

"Momentum is overbought with an RSI at 71 and the latest couple of candles are showing extended upper shadows, hinting to exhaustion.

"We see near-term resistance in the lower 1.34s and look to support in the upper 1.32s.

The Pound US Dollar exchange rate traded sideways on Tuesday as markets continued to digest US President Donald Trump’s latest comments.

The US Dollar (USD) faced headwinds on Tuesday, slipping against most major currencies after fresh criticism from Donald Trump aimed at Federal Reserve Chair Jerome Powell.

Trump’s latest remarks, branding Powell as “Mr too late” and a “major loser,” stirred unease among investors, fuelling uncertainty over the Fed’s policy path.


With pressure mounting from the President for interest rate cuts, appetite for the Greenback remained subdued as markets hesitated to make bold moves.

Stephen Innes, managing partner at SPI Asset Management, said: ‘Markets are starting to question one of the bedrock assumptions behind the dollar’s reserve currency status: an independent, inflation-fighting Fed. With President Trump ramping up public pressure on Powell to slash rates “now,” we’re not just flirting with jawboning—we’re staring down the barrel of a credibility unwind.’

The Pound (GBP) held firm against most major currencies on Tuesday as European markets resumed following the Easter break.

Sterling drew modest support from a weakening US Dollar (USD) and renewed speculation over possible UK–US trade negotiations.

However, gains were kept in check as investors looked ahead to a speech from Bank of England (BoE) Deputy Governor Sarah Breeden.

Markets remained alert for any suggestion that global economic headwinds could prompt the BoE to consider loosening policy further, an outcome that could drag on the Pound.

Pound Sterling to Dollar FX Outlook

Looking to Wednesday, movement in the Pound US Dollar exchange rate is set to be shaped by the latest PMI releases from both the UK and the US.

UK flash estimates for the manufacturing and services sectors are projected to decline, and if confirmed, could drag on the Pound by reinforcing fears of a slowdown in economic activity.

Across the Atlantic, US PMI readings are also expected to soften.

A weaker-than-expected print could add to the pressure on the US Dollar, keeping it on the back foot as the week progresses.

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TAGS: Currency Predictions Pound Dollar Forecasts