Sterling found support on Thursday after an initial drop, with GBP/USD trading nearly flat in the New York session at 1.27. The early slide to 1.2630 overnight was tempered as U.S. Treasury yields pulled back, limiting the appeal of the dollar. Market focus remains on Trump-driven trades, but recent technical resilience and a comparatively higher UK rate outlook for 2025 compared to the Fed’s IRPR may slow sterling’s downward momentum. With year-end approaching, GBP bears face an essential question: How low can sterling go before encountering firmer buying interest?

On the technical side, GBP/USD is seeing support at 1.2679, supported by the rising 10-hour moving average. The Thursday low of 1.2630 and the June 27 low at 1.2613 provide additional floor levels. On the upside, resistance lies at Thursday’s daily high of 1.2720, with further resistance from the lower 30-day Bollinger Band at 1.2757 and the 200-day moving average at 1.2820. These levels represent potential hurdles for sterling’s recovery.

Looking ahead, as Trump-related USD demand may begin to wane, GBP/USD could find opportunities to rebound from these support levels. The UK’s relatively hawkish rate expectations into 2025 may also serve as a tailwind for GBP in the medium term, especially if the dollar loses steam approaching year-end.