GBP/USD bulls were thrown a lifeline on Friday in the form of below-forecast U.S. PCE data, which slightly softened market expectations of the Fed rates in second half of 2025 and could keep cable off recent trend lows.

The data still left STIR futures discounting a pause at January's FOMC meeting while Fed speakers including Mary Daly, John Williams, and Beth Hammack, maintained a data-dependent stance.

Still, the somewhat tempered hawkish tone may prevent GBP/USD from testing trend lows below 1.25 as yearend approaches, though considering the more dovish hold by the BoE on Thursday could increase volatility in 2025.

With U.S. Treasury yields declining after the post-Fed bump higher, price action for the remaining trading sessions in 2024 are likely to be based more on position curating rather than growth or fundamentals.

The trend low at 1.2475 -- struck in November and revisited earlier on Friday -- is the first level of support, followed by 1.2446, the May 10 weekly low.
On the topside, 1.2643 the 50% Fib of 1.2811-1.2475, followed by a series of DMAs from 1.2643 to 1.2670, should cap.

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