Pound to Dollar FX Forecast: "No Major Resistance Levels Ahead of 1.3750"

June 17, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar FX Forecast: "No Major Resistance Levels Ahead of 1.3750"

The Pound to Dollar exchange rate (GBP/USD) was unable to break above the 1.3600 level and settled just below this level in quiet, but nervous trading conditions.

According to Scotiabank, “The RSI is bullish but well short of overbought levels, and there appear to be no major resistance levels ahead of 1.3750. We look to near-term support around 1.3520 and near-term resistance in the lower 1.36s.”

UoB is now less confident that GBP/USD can break above 1.3640 and added, “Momentum indicators are turning flat, and the current price movements are likely part of a sideways trading phase, probably between 1.3515 and 1.3605.”

Markets are continuing to monitor Middle East conditions closely with Israel and Iran continuing to engage in retaliatory air strikes.

Oil prices edged lower during the day and equities were able to make headway which helped protect the Pound in global markets.

Nick Rees, head of macro research at Monex Europe; "The pound is trading largely in line with its relative sensitivity to risk.”

There was still an important underlying element of caution given the risk of escalation in the Middle East.


Rees added; "We do not want another big stagflationary shock and that's exactly what it looks like this could turn into. Markets should be pricing that in."

The dollar overall was still struggling for sustained support with further speculation over net capital outflows.

Scotiabank commented; “Geo-political risk gave the USD a small lift from a new cycle low last week but impact was short-lived and broader USD negative considerations (USD valuation, weak US fiscal policy, international pivot from highly-valued US assets) remain.”

According to ING; “In our view, that is once again the symptom of the market’s distrust in the dollar at the moment, so even a clear-cut dollar positive event like an oil price shock mixed with geopolitical tensions fails to discourage the methodical USD-short building we have observed in the past couple of months every time the dollar was attempting a recovery.”

MUFG notes the potential for defensive dollar demand. “While it is too early to say that the latest developments in the Middle East will trigger another oil price shock, it has the potential to be a catalyst that could trigger a reversal of the current USD weakening trend.”

It added, “With the global economy already facing headwinds from global trade disruption and heightened policy uncertainty, another energy price shock would be an unwelcome development and increase the risk of a deeper global slowdown/recession.”

As far as economic data is concerned, the New York Empire manufacturing index dipped sharply to -16.0 for June from -9.2 the previous month and below consensus forecasts of -6.0 with a sharp decline in orders.


Companies were, however, more optimistic over the outlook, while pricing pressures were mixed.

According to Scotiabank, “Domestic risk is elevated this week as markets await Wednesday’s CPI release, coming just ahead of Thursday’s BoE, where policymakers are expected to deliver a widely anticipated hold.”

There are strong expectations that the BoE will hold interest rates at 4.25% at this week’s policy meeting. There will, however, be speculation over more dovish commentary and guidance from the bank.

Consensus forecasts are for the headline inflation rate to decline to 3.3% from 3.5% previously with the core rate expected to retreat to 3.5% from 3.8%.

Weaker-than-expected data would increase market expectations of a more aggressive Bank of England policy.

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TAGS: Pound Dollar Forecasts