GBPUSD: Room to Rebound into Next Year

UBS maintains a long-term bullish outlook for GBPUSD, targeting 1.37-1.40 into 2027 despite short-term risks from a hawkish Federal Reserve. Resilience in the pound is supported by heavy short positioning and positive UK economic data.

Key Takeaways

• 1.GBPUSD is expected to move higher into next year with reference levels at 1.37-1.40.
• 2.Short-term pullbacks for the GBPUSD pair to 1.30 are possible due to Federal Reserve hawkishness.
• 3.The Pound has remained resilient despite geopolitical and domestic UK political headwinds due to heavy short positioning and positive economic surprises.

Table of Contents

• Underappreciated UK news flow
• Domestic US strength versus fading external tailwinds
• CIO Forecast- GBPUSD
• GBPUSD moving higher
• Investment considerations
• Risk information

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