GBP/USD spins its wheels near 1.25

• GBP/USD roiled near the 1.2500 handle on Monday.
• Pound traders are taking a backseat as markets focus on the Greenback.
• Investor sentiment spread in both directions to kick off the new week.

GBP/USD spun in a circle on Monday, driven by broad-market flows into and out of the US Dollar (USD) as Pound Sterling (GBP) traders get dragged along by the tides. It's a quiet week on the UK side of the economic calendar, and trade war murmurs as well as an impending Federal Reserve (Fed) rate call are keeping market attention off of the Cable trade for now.

The Federal Reserve (Fed) is expected to hold rates steady at their upcoming meeting slated for Wednesday, but overall market expectations of further rate cuts for the year are on the rise. According to the CME's FedWatch Tool, rate markets are pricing in a total of 50 bps in rate cuts through 2025, up from the previous forecast of 25 bps.

US President Donald Trump kicked off his first meaningful trade war spat over the weekend with Colombia of all countries, threatening a wide 50% tariff on all goods from Colombia imported into the US if the country refused to accept planes loaded with Colombian migrants being returned home from the US. Most of the spat took place on social media and had little measurable impact on global markets. Still, President Trump's tariff threats and his willingness to use them on short notice will likely ruffle some feathers for investors that have been used to a less-chaotic method of trade governance.

GBP/USD price forecast

GBP/USD has beaten footprints into the charts on both sides of the 1.2500 handle on Monday, chalking in an intraday high above 1.2520 before pivoting back into the low side near 1.2480. With price action getting hung up on tech levels just south of the 50-day Exponential Moving Average (EMA) at 1.2517, bids are at risk of pricing in a near-term ceiling and giving bears a foothold in the daily charts.

GBP/USD daily chart