GBPUSD is pushing upward following the Trump–Putin talks about ending the Ukraine war and stronger-than-expected fourth-quarter GDP data from the United Kingdom. 

UK GDP for Q4 was expected to contract by 0.1%, but instead, the economy grew by 0.1%, according to preliminary data. Additionally, in December, the trade deficit shrank significantly more than expected, and industrial production rose by 0.5% (compared to the 0.2% forecast). The combination of strong GDP, trade, and production data is fueling GBP bulls, driving the currency higher despite last week’s dovish Bank of England meeting. 

Trump’s conversation with Putin about ending the war in Ukraine has reduced safe-haven demand, leading to a pullback in the US dollar. However, this development could be particularly positive for GBP compared to other currencies, as the UK’s gas storage levels are critically low. While government officials downplay the risk of a gas shortage, citing a strong supply chain, storage levels remain well below historical averages—making this a potential “black swan” risk for 2025. 

(GBPUSD Daily Chart) 

GBPUSD exited the downtrend in late January in a sideways manner. Currently, it is ranging between 1.2250 and 1.2550, attempting to hold above the 50-day moving average. A sustained move above this level and a breakout from the sideways trading range could push GBPUSD toward the 1.2610 resistance, which corresponds to the 38.2% Fibonacci retracement level. Further gains would depend on incoming economic data and tariff decisions, potentially targeting the 200-day moving average, which is near the midpoint of the September–January decline. 

The 200-day moving average has acted as both support and resistance for medium-term price movements for some time. Unless a breakout occurs, the medium-term trend will likely remain downward, even if GBPUSD manages to surpass 1.2550 and 1.2610. For now, sideways movement could persist due to a lack of fundamental catalysts for a breakout. However, in this new Trump era, market conditions can shift very quickly.