CFD Trading Rate Great Britain Pound vs US Dollar (GBPUSD)

• GBP/USD remains firm around 1.3385 in Monday’s early Asian session. 
• August US PCE inflation eased to within reach of the Fed target. 
• The BoE is expected to cut interest rates once by the year-end.

The GBP/USD pair holds positive ground near 1.3385 during the early Asian session on Monday. Expectations of further interest rate cuts by the Federal Reserve (Fed) and the less dovish stance of the Bank of England's (BoE) less dovish rate cut bets provide some support to the major pair. Fed Governor Michelle Bowman is scheduled to speak later on Monday. 

US inflation has cooled to a pace nearer to the Fed's 2% target. The headline Personal Consumption Expenditures (PCE) Price Index rose by 2.2% year-over-year in August, compared to 2.5% in July, the US Bureau of Economic Analysis (BEA) showed on Friday. This figure was softer than the estimations of 2.3%. The core PCE climbed 2.7% in August, in line with the consensus.

On a monthly basis, the PCE Price Index increased by 0.1% in the same report period. Interest rate futures contracts have priced in a nearly 54% chance of a half-point cut in November, versus a 46% possibility of a quarter-point cut, according to the CME FedWatch Tool. 

The upside of the Pound Sterling (GBP) is supported by the anticipation that the BoE rate-cutting cycle is likely to be slower than in the United States (US). This, in turn, acts as a tailwind for GBP/USD. Amid the lack of top-tier UK economic data released from the UK docket this week, the GBP will be influenced by market expectations for the BoE monetary policy action for the remainder of the year.

• GBP/USD trades at 1.3403, down 0.08%, close to its two-year peak.
• Momentum fades with potential negative divergence, but a break above 1.3437 could target 1.3450 and 1.3500.
• A drop below 1.3312 could see further declines toward the September 23 low of 1.3248.

The Pound Sterling registered minuscule losses against the Greenback, yet it remains close to two-year peak levels on Friday. The US Bureau of Economic Analysis revealed that inflation is about to hit the Fed’s 2% target. At the time of writing, the GBP/USD trades at 1.3403, down 0.08%.

GBP/USD Price Forecast: Technical outlook

The pair is upward biased, though the trend has lost some steam as buyers failed to push the GBP/USD to a new record high in 2024.

As price action continues to edge higher, momentum has faded. The Relative Strength Index (RSI) continues to edge lower, while spot prices are aimed higher. Hence, a negative divergence might be forming, but sellers must push prices below the top trendline of an ascending channel.

If GBP/USD extends its gains past the March 1, 2022 peak of 1.3437, the next resistance would be 1.3450, followed by 1.3500.

Conversely, if the major drops below the September 25, 26 low of 1.3312, further losses beneath. The next support would be the September 23 low at 1.3248, followed by the 1.3200 figure.

GBP/USD Price Action – Daily Chart

Room for the Pound Sterling (GBP) to edge higher, but any advance is unlikely to break above 1.3455. In the longer run, GBP must break and hold above 1.3455 to resume strength, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP must hold above 1.3455 to resume strength

24-HOUR VIEW: “Our view for GBP to ‘continue to decline’ yesterday was incorrect. Instead of declining, GBP rose and reached a high of 1.3434. Despite the relatively strong advance, there has been no significant increase in momentum. Today, there is room for GBP to edge higher, but any advance is unlikely to break above 1.3455. Support is at 1.3375, followed by 1.3340.”

1-3 WEEKS VIEW: “Yesterday (26 Sep, spot at 1.3325), we indicated that ‘the more than week-long GBP strength has ended.’ We expected GBP to ‘trade in a 1.3200/1.3430 range for the time being.’ We did not anticipate GBP to test 1.3430 as quickly, as it rose to a high of 1.3434 in NY trade. While upward momentum seems to be building again, it is not enough to indicate the resumption of GBP strength. GBP must break and hold above 1.3455 before further advance to 1.3500 can be expected. The likelihood of GBP breaking clearly above 1.3455 appears low for now, but it will remain intact as long as 1.3310 is not breached within these few days.”

• GBP/USD attracts some sellers on Friday and is pressured by a modest USD strength.
• Bets for another oversized Fed rate cut in November should cap gains for the buck.
• A relatively hawkish BoE expectations should contribute to limiting losses for the pair.

The GBP/USD pair drifts lower during the Asian session on Friday and moves away from its highest levels since March 2022, around the 1.3435 region touched the previous day. Spot prices slide below the 1.3400 mark in the last hour amid a modest US Dollar (USD) uptick, though any meaningful corrective decline still seems elusive. 

The Greenback attracts some buyers and reverses a part of the previous day's losses amid some repositioning trade ahead of the crucial US inflation data – the Personal Consumption Expenditure (PCE) Price Index due later today. In the meantime, rising bets for a more aggressive policy easing by the Federal Reserve (Fed), along with the upbeat market mood, should cap the upside for the safe-haven buck. 

Despite the fact that several Federal Reserve (Fed) officials this week tried to push back against bets for a more aggressive policy easing, the markets are pricing in a greater chance of another oversized rate cut in November. This overshadowed Thursday's better-than-expected US macro data and should hold back the USD bulls from placing fresh bets, which, in turn, should lend support to the GBP/USD pair. 

Meanwhile, the global risk sentiment remains supported by hopes that interest rate cuts will boost global economic activity. Adding to this, a slew of stimulus measures from the People's Bank of China (PBOC), including Friday's announcement to cut the seven-day repo rate to 1.5% from 1.7% and lower the Reserve Requirement Ratio (RRR) by 50 bps, further boosts investors' appetite for riskier assets.

Furthermore, expectations that the Bank of England's (BoE) rate-cutting cycle is likely to be slower than in the United States (US) should continue to underpin the British Pound (GBP) and contribute to limiting losses for the GBP/USD pair. This makes it prudent to wait for strong follow-through selling before confirming a near-term top for the major, which remains on track to end the week on a positive note.

• GBP/USD edged into a fresh multi-year high on Thursday.
• Despite a lack of UK data, GBP continues to grind higher.
• Better-than-expected US data keeps Greenback short pressure elevated.

The GBP/USD currency pair reached a 31-month high of 1.3434 on Thursday, marking a significant milestone in its upward trajectory. This surge was primarily driven by a widespread selloff of the US dollar, buoyed by improved economic indicators that alleviated concerns about a potential economic slowdown.

The data docket remains light on the UK side for the remainder of the week, and Cable traders will be forced to sit on their hands and wait for GBP-centric data due next week, starting with UK Gross Domestic Product (GDP) figure slated for Monday.

The Federal Reserve's recent decision to cut interest rates by 50 basis points raised apprehensions in global markets, with some investors fearing that the drastic move was a response to an impending economic downturn in the US. However, Fed Chair Jerome Powell clarified that the rate cut was a proactive measure aimed at supporting the US labor market, rather than a reactive response to recessionary signals.

Positive data on US Durable Goods Orders and weekly Initial Jobless Claims further reinforced the Fed's position, with both indicators surpassing expectations. The narrative of a "soft landing" for the economy remained intact. The upcoming release of the Personal Consumption Expenditure (PCE) inflation data on Friday will serve as a crucial litmus test for evaluating the impact of the recent rate cut by the Fed.

In August, US Durable Goods Orders stagnated at 0.0% month-on-month, falling short of the previous month's significant growth but still outperforming the projected contraction of 2.6%. Additionally, the Initial Jobless Claims for the week ending September 20 showed a decrease to 218K, beating the anticipated 225K and signaling a decline from the revised figure of 222K in the preceding week.

GBP/USD price forecast

The GBP/USD, also known as Cable, has been steadily reaching multi-year highs, and there are few significant technical obstacles in the way for Pound bulls. However, the strong upward momentum has made GBP/USD vulnerable to a possible downward correction as market dynamics come into play. If there is a significant buildup of selling pressure in the current price region, it could easily push the price below the key support level at 1.3100 and towards the 50-day Exponential Moving Average (EMA) at 1.3076.

GBP/USD daily chart

• GBP/USD got pushed into another multi-year high on Thursday.
• Broad-market Greenback weakness has bolstered Cable further.
• The Pound Sterling rally is continuing unabated despite a lack of UK data.

GBP/USD clipped another multi-year peak on Thursday, hitting a 31-month high bid 1.3434 as Cable gets pushed into the high end by broad-market Greenback selling. Risk appetite has swung back into the high end on the back of better-than-expected US economic figures, easing investor concerns of a potential economic slowdown.

The Federal Reserve's (Fed) recent 50 bps rate trim sparked an undercurrent of concern in global markets, with some investors spooked by the possibility that the Fed's jumbo rate cut might have been in response to a looming economic slowdown with the US. Fed Chair Jerome Powell insisted last week that the Fed's double cut was not a rapid response to potential recession data, but rather a pre-emptive move to help shore up the US labor market.

US Durable Goods Orders and week-on-week Initial Jobless Claims helped to bolster the Fed head's case, with both figure printing better than expected and the "soft landing" economic rhetoric holding steady. However, Friday's Personal Consumption Expenditure (PCE) inflation print will draw plenty of attention, and will be the real test of last week's Fed rate cut.

US Durable Goods Orders in August printed a flat 0.0% MoM, well below the previous month's revised 9.9%, but still beat the forecast of a 2.6% contraction. Initial Jobless Claims for the week ended September 20 also beat forecasts, printing at 218K versus the expected 225K and easing down from the previous week's revised 222K.

GBP/USD price forecast

With Cable continuing to grind through multi-year highs, little relevant technical resistance lies in the way of Pound bulls. However, an extremely one-sided push into the high end has left GBP/USD price action exposed to a potential downside snap as market velocity takes hold. A buildup of short pressure at the current region could easily shoot bids back below the 1.3100 handle and into the 50-day Exponential Moving Average (EMA) at 1.3076.

GBP/USD daily chart

• GBP/USD gains 0.59%, trading at 1.3394 after rebounding from a daily low of 1.3312.
• Break above 1.3400 could push the pair towards the YTD high of 1.3437 and further resistance at 1.3500.
• Failure to reclaim 1.3400 may lead to testing the September 25 low of 1.3312.

The Pound Sterling climbs over 0.59% against the Greenback, boosted by an improvement in risk appetite, sponsored by China’s stimulus to its economy and increasing odds for a ‘soft landing’ in the US after revealing robust economic data. The GBP/USD trades at 1.3394 after bouncing off daily lows of 1.3312.

GBP/USD Price Forecast: Technical outlook

The GBP/USD resumed its uptrend after diving below the top trendline of an ascending channel, which, in the short term, was a sign of sellers’ strength. However, bulls emerged around the week's lows and lifted the exchange rate. Still, it remains shy of the crucial 1.3400 figure, today’s high.

If GBP/USD reclaims 1.3400, the next resistance will be the 1.3429-1.3437 area, the confluence of the current year-to-date (YTD) high and March 1, 2022 daily high, followed by 1.3450. On further strength, 1.3500 will emerge as the next key resistance level.

Conversely, GBP/USD failure at 1.3400 will sponsor a test of the September 25 daily low of 1.3312. A decisive break will expose the August 27 high turned support at 1.3266, followed by the September 23 low of 1.3248.

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) could continue to decline; oversold weakness suggest it is unlikely to threaten the support at 1.3250. In the longer run, more than week-long GBP strength has ended; it is likely to trade in a 1.3200/1.3430 range for the time being, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

Likely to trade in a 1.3200/1.3430

24-HOUR VIEW: “We were of the view that GBP ‘could rise and potentially reach 1.3450’ yesterday. However, after rising to 1.3430, GBP fell and broke below a few support levels, reaching a low of 1.3314. While GBP could continue to decline today, oversold conditions suggest that any weakness is unlikely to threaten the support at 1.3250 (minor support is at 1.3290). On the upside, resistance levels are at 1.3360 and 1.3390.”

1-3 WEEKS VIEW: “Last Tuesday (17 Sep, spot at 1.3210), we indicated that ‘increase in momentum is likely to lead to further GBP strength.’ As GBP subsequently rose, we tracked the advance, and yesterday (25 Sep, spot at 1.3420) we indicated that ‘the boost in momentum indicates further GBP strength is likely, and the next level to watch is 1.3480.’ GBP then rose to 1.3430 and then fell sharply, breaking below our ‘strong support’ level at 1.3330. The breach of the ‘strong support’ level, combined with an ‘outside reversal day’ indicates that GBP strength has ended. The current price movements are likely the early stages of a range trading phase. In other words, we expect GBP to trade in a range for the time being, likely between 1.3200 and 1.3430.”

• GBP/USD attracts some dip-buying on Thursday amid a modest USD downtick.
• Bets for another 50 bps Fed rate cut and a positive risk tone undermine the USD.
• The BoE’s relatively hawkish stance remains supportive ahead of Powell’s speech.

The GBP/USD pair regains some positive traction during the Asian session on Thursday and reverses part of the overnight sharp retracement slide from the 1.3430 region, or its highest level since March 2022. Spot prices currently trade around the 1.3335-1.3340 area, up just over 0.10% for the day, and seem poised to resume the recent uptrend witnessed over the past two weeks or so. 

Despite the fact that several Federal Reserve (Fed) officials this week tried to push back against market expectations for a more aggressive policy easing going forward, investors are still pricing in a greater chance of an oversized rate cut in November. This, along with the underlying bullish sentiment surrounding the global financial markets, fails to assist the safe-haven US Dollar (USD) to capitalize on Wednesday's solid rebound from the vicinity of the YTD low. This, in turn, is seen as a key factor lending some support to the GBP/USD pair. 

Apart from this, expectations that the Bank of England's (BoE) rate-cutting cycle is more likely to be slower than in the United States (US) continues to underpin the British Pound (GBP) and contributes to the GBP/USD pair's intraday uptick. Bullish traders, however, might opt to wait for more cues about the Fed's rate-cut path before positioning for any further appreciating move. Hence, the focus remains glued to speeches by influential FOMC members, including Fed Chair Jerome Powell, which will drive the USD and provide a fresh impetus.

Traders on Thursday will further look to the US economic docket – featuring the release of the final Q2 GDP print, Weekly Initial Jobless Claims and Durable Goods Orders – to grab short-term opportunities later during the early North American session. The aforementioned fundamental backdrop, meanwhile, suggests that the path of least resistance for the GBP/USD pair remains to the upside. Hence, any meaningful corrective decline might still be seen as a buying opportunity and is more likely to remain limited.

• GBP/USD turned bearish and dropped back below 1.34 on Wednesday.
• Markets pared back their recent tilt into a Pound Sterling bull run.
• The US Dollar recovered ground as investors weigh the state of the US economy.

GBP/USD struck an abnormally nearish tone on Wednesday, plunging back below the 1.3400 handle amid a broad-market pullback from full-bore risk appetite. The Pound Sterling paused its recent one-sided trend into the high side, while the Greenback pared recent losses.

The Pound Sterling will be entirely absent from the economic calendar data docket for the remainder of the week, leaving GBP/USD traders to grapple with Friday’s upcoming US inflation print.

US consumer confidence indicators fell this week as the average US consumer doesn’t share in the stock market’s exuberance over Fed rate cuts, with key confidence readings falling to their lowest levels in three years and consumer inflation expectations for the next 12 months ticking higher. This Friday will see a fresh update to US Personal Consumption Expenditure (PCE) inflation figures.

New home sales also fell in August, declining 4.7% to 716K from the previous month’s revised 751K. Meanwhile, investors will see another print of US Gross Domestic Product (GDP) growth for the second quarter, expected to hold steady at 3.0% on an annualized basis. Thursday will also bring a slew of speeches and public appearances from several Fed officials, including Fed Chair Jerome Powell.

GBP/USD price forecast

Wednesday’s bearish reversal has pulled Cable back below 1.3400, and price action is poised for a continuation into the low side. Particularly brassve short sellers will be targeting the 50-day Exponential Moving Average (EMA) all the way down at 1.3062. GBP/USD bidders will be looking to recover ground back into 30-month highs set this week at 1.3430.

GBP/USD daily chart

• GBP/USD drops to 1.3389 from a yearly high of 1.3429 as the US Dollar strengthens.
• Pullback to the top of an ascending channel at 1.3363 may offer buying opportunities, with RSI still favoring buyers.
• Maintaining above 1.3363 could push GBP/USD to retest the yearly high of 1.3429 and aim for 1.3437, 1.3450, and 1.3500.
• Falling below 1.3363 might lead to testing the week’s low at 1.3248 and further support at the September 19 low of 1.3153.

The Pound Sterling lost some steam against the US Dollar in early trading during Wednesday’s North American session after hitting a yearly peak of 1.3429. The GBP/USD trades at 1.3389, down 0.18%, as the Greenback recovers some ground.

GBP/USD Price Forecast: Technical outlook

From a technical standpoint, the GBP/USD pullback toward the top of an ascending channel at 1.3363 opened the door for further buying, as seen by price action.

The Relative Strength Index (RSI) hints that buyers remain in charge. However, in the short term, the GBP/USD might print another leg-down before resuming its rally, which could put the March 1, 2022, peak at 1.3437 to the test.

If GBP/USD remains above 1.3363, this could pave the way to challenge the current yearly high of 1.3429. On further strength, that will expose 1.3437, followed by the 1.3450 figure, ahead of 1.3500.

Conversely, if the pair slumps past 1.3363, it could hit the current week’s low of 1.3248. On further weakness, the bulls’ following line of defense will be the September 19 daily low of 1.3153.

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) could rise and potentially reach 1.3450; the next resistance at 1.3480 is unlikely to come into view. Boost in momentum indicates further GBP strength; the next level to watch is 1.3480, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

Above 1.3450 GBP can reach 1.3480

24-HOUR VIEW: “While we expected GBP to strengthen yesterday, we indicated that it ‘is unlikely to reach the major resistance at 1.3400.’ The anticipated advance exceeded our expectations, as GBP soared and broke clearly above 1.3400. GBP continues to rise in early Asian trade today, and it could potentially reach 1.3450. The next resistance at 1.3480 is unlikely to come into view. Support levels are at 1.3400 and 1.3365.”

1-3 WEEKS VIEW: “Yesterday (24 Sep, spot at 1.3345), we highlighted after the price movements on Monday, ‘there has only been a slight increase in momentum, and it remains to be seen if GBP can break above the significant resistance at 1.3400.’ We were surprised by the ease with which GBP broke above 1.3400. The boost in momentum indicates further GBP strength is likely. The next level to watch is 1.3480. On the downside, if GBP breaches 1.3330 (‘strong support’ level previously at 1.3250), it would mean that the GBP strength from early last week has come to an end.”

• GBP/USD scales higher for the fifth straight day and climbs to a fresh 20-month peak. 
• A combination of factors continues to weigh on the USD and lends support to the pair.
• The BoE’s relatively hawkish stance underpins the GBP and contributes to the move up.

The GBP/USD pair builds on its recent gains registered over the past two weeks and advances to its highest level since March 2022, around the 1.3430 region during the Asian session on Wednesday. Meanwhile, the fundamental backdrop suggests that the path of least resistance for spot prices is to the upside, though slightly overbought conditions on the daily chart warrant some caution for bullish traders. 

The British Pound (GBP) continues to draw support from expectations that the Bank of England's (BoE) rate-cutting cycle is more likely to be slower than in the United States (US). In fact, BoE Governor Andrew Bailey said on Tuesday that the path for interest rates will be downwards, though the progress in this direction will be slow and unlikely to fall back to ultra-low levels without very big shocks. In contrast, the markets have been pricing in a more aggressive policy easing by the Federal Reserve (Fed), which keeps the US Dollar (USD) depressed near the YTD low and acts as a tailwind for the GBP/USD pair. 

According to the CME Group's FedWatch Tool, the markets are currently pricing in over a 75% chance that the Federal Reserve will cut interest rates by another 50 basis points in November. Adding to this, Tuesday's weaker US macro data, along with the prevalent risk-on environment, continues to undermine the safe-haven buck and validates the near-term positive outlook for the GBP/USD pair. That said, the Relative Strength Index (RSI) on the daily chart has climbed beyond the 70 mark, making it prudent to wait for some near-term consolidation or a modest pullback and positioning for any further appreciating move. 

Moving ahead, there isn't any relevant market-moving economic data due for release from the UK on Wednesday. That said, a scheduled speech by the BoE MPC Member Megan Greene might influence the GBP and provide some impetus to the GBP/USD pair. Later during the early North American session, New Home Sales data from the US might contribute to producing short-term trading opportunities. Traders, however, might refrain from placing aggressive bets ahead of speeches by influential FOMC members this week, including the Fed Chair Jerome Powell on Thursday, and the US PCE Price Index on Friday.

• GBP/USD continues Pound rally on Greenback weakness.
• US consumer sentiment data shows US consumer still fear inflation.
• Markets have leaned into higher expectations of further outsized Fed cuts.

GBP/USD extended the ongoing Pound Sterling rally for another consecutive day, crossing the 1.3400 handle and chalking in fresh 30-month highs after the US Dollar broadly weakened on Tuesday. The Greenback’s market-wide withering gave Cable exactly what it needed to keep the current Pound Sterling bull run on-balance.

Wednesday will be a quiet showing for the Pound Sterling on the data docket, although GBP traders will be keeping one eye out for statements from Bank of England (BoE) Monetary Policy Committee (MPC) member Megan Greene. MPC Member Greene will be speaking at the North East Chamber of Commerce in England.

The American side of Tuesday’s economic data docket is similarly under-weighted for the midweek market session. August’s New Homes Sales MoM figure is unlikely to drive much momentum in either direction, and will be followed by a speech from Federal Reserve (Fed) Board of Governors member Adriana Kugler, who will be speaking at the Harvard Kennedy School in Cambridge.

Consumer confidence deteriorated across the board on Tuesday, and consumer expectations of 12-month inflation accelerated to 5.2%. Consumers also reported a general weakening of their six-month family financial situation outlook, and consumer assessments of overall business conditions have turned negative.

Backsliding consumer confidence results sparked a renewed bid in rate markets for a follow-up jumbo cut in November. According to the CME’s FedWatch Tool, rate markets are pricing in nearly 60% odds of a second 50 bps rate cut on November 7, and only 40% odds of a more reasonable 25 bps follow-up rate trim. Rate traders were pricing in roughly even odds of a 50 or 25 bps rate cut at the beginning of the week.

GBP/USD price forecast

CAble buyers continue to shrug off all near-term warning signs, pushing GBP/USD deeper into overbought territory. The pair has gained over 3% over the last two weeks, rallying from the last swing low on daily candlesticks into the 1.3000 handle.

With price action trading north of 1.3400, short sellers are faced with difficult choices; while Cable looks increasingly appetizing for a snap play to the low side, a lack of technical resistance means timing a short entry carries excessive risks to bid directly against still-healthy bullish momentum.

GBP/USD daily chart

• GBP/USD clears the top of an ascending channel and nears the YTD high of 1.3398.
• The Relative Strength Index (RSI) favors buyers, breaking above 70 despite entering overbought territory, signaling potential for further gains.
• Next resistance levels include the March 1, 2022, high at 1.3437 and the psychological 1.3500 mark.
• A pullback could see the pair test support at 1.3350, with further downside targeting 1.3298, 1.3266, and the 1.3200 figure.

The Pound Sterling extended its gains against the US Dollar on Tuesday amid a scarce economic docket in the UK. Across the pond, the US Conference Board Consumer Confidence tumbled on labor market views, sending the Greenback sliding and underpinning other currencies higher. The GBP/USD trades at 1.3388 and advances more than 0.30%.

GBP/USD Price Forecast: Technical outlook

From a technical standpoint, the GBP/USD has cleared the top of an ascending channel, about to challenge the year-to-date (YTD) high of 1.3398, shy of the 1.34 handle. The Relative Strength Index (RSI) favors buyers despite breaking above the 70 marks, seen as overbought territory. However, this could exacerbate a leg-up, before retreating to lower prices.

The next key resistance for GBP/USD will be the March 1, 2022, daily high at 1.3437, followed by the 1.3500 figure. Conversely, if the exchange rate drops below 1.3350, this could pave the way for a pullback. The next support will be the March 23, 2022, daily peak turned support at 1.3298, followed by the August 27 high at 1.3266 and the 1.3200 mark.

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) could edge higher but is unlikely to reach the major resistance at 1.3400. In the longer run, there has only been a slight increase in momentum, and it remains to be seen if GBP can break above 1.3400, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

To remain bullish above 1.3250

24-HOUR VIEW: “Yesterday, we expected GBP to trade in a range between 1.3270 and 1.3340. We did not anticipate the ensuing volatility as GBP fell sharply, but briefly to 1.3249, snapping back up to reach a high of 1.3360. Despite the strong advance from the low, upward momentum has not increased much. Today, GBP could edge higher, but it is unlikely to reach the major resistance at 1.3400 (there is another resistance at 1.3370). Support is at 1.3325; a breach of 1.3300 would indicate that the current upward pressure has faded.”

1-3 WEEKS VIEW: “We have held a positive GBP view since early last week (see annotations in the chart below). In our latest narrative from last Friday (20 Sep, spot at 1.3280), we highlighted that “while the price action continues to suggest GBP strength, overbought conditions could potentially limit any further advance.” We added, “the next level to watch is 1.3350.” Yesterday (23 Sep, spot at 1.3310), we indicated that “while GBP could rise above 1.3350, the potential of it reaching 1.3400 seems low for now.” GBP subsequently rose to 1.3360. There has only been a slight increase in momentum, and it remains to be seen if GBP can break above the significant resistance at 1.3400. On the downside, should GBP break below 1.3250 (‘strong support’ level previously at 1.3210), it would mean that it is not strengthening further.”

• GBP/USD marked its 31-month high level of 1.3359, recorded on Monday.
• The US Dollar receives downward pressure due to dovish Fedspeak.
• UK Prime Minister Starmer has voiced concerns that the domestic economy could be heading toward “painful” economic reforms.

GBP/USD extends its winning streak for the fifth consecutive session, trading around 1.3350 during the Asian hours on Tuesday. The pair maintains its position near its 31-month high level of 1.3359, recorded on Monday.

The US Dollar (USD) may depreciate due to increasing expectations for further rate cuts by the US Federal Reserve (Fed) in 2024. According to the CME FedWatch Tool, markets are pricing in a 50% likelihood of a 75 basis point reduction, bringing the Fed's rate to a range of 4.0-4.25% by the end of this year.

Minneapolis Fed President Neel Kashkari said on Monday that he believes there should be and will be additional interest rate cuts in 2024. However, Kashkari expects future cuts to be smaller than the one from the September meeting. Additionally, Chicago Fed President Austan Goolsbee noted, “Many more rate cuts are likely needed over the next year, rates need to come down significantly,” per Reuters.

On the data front, the S&P Global US Composite PMI grew at a slower rate in September, registering 54.4 compared to 54.6 in August. The Manufacturing PMI unexpectedly dropped to 47.0, indicating contraction, while the Services PMI expanded more than anticipated, reaching 55.4, data showed on Monday.

In the United Kingdom (UK), the preliminary UK Manufacturing Purchasing Managers' Index (PMI) fell to 51.5 in September, down from 52.5 in August, missing the market expectation of 52.3. Similarly, the Services PMI declined to 52.8 in September from 53.7 in August, also below the market forecast of 53.5.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated, “A slight cooling of output growth across manufacturing and services in September should not be viewed as overly concerning.”

UK Prime Minister Keir Starmer has expressed concerns that the domestic economy may be on a collision course with “painful” economic reforms, particularly as UK inflation figures remain significantly stickier than those in other countries.

• GBP/USD clipped into another 30-month high on Monday.
• The Pound Sterling may be running out of runway despite Greenback weakness.
• UK could be headed for a rapid shift in economic conditions as UK PM mulls fiscal changes.

GBP/USD found its way into yet another 30-month high on to kick off the fresh trading week, pulling deeper into bull country on the back of broad-market Greenback selling pressure. The Federal Reserve’s (Fed) last-minute plunge into a double rate cut last week has sparked a weak stance in USD flows, helping to muscle GBP into the top end.

Markets will get a breather on Tuesday, with little data of note on the UK side. On the US economic calendar, it’s strictly a mid-tier showing, though investors will be keeping an eye out for comments from Fed Governor Michelle Bowman due during the US market session.

Political threats loom just over the horizon for the Pound Sterling; UK Prime Minister Keir Starmer has mused out loud that the UK’s domestic economy could be on a collision course with “painful” economic reforms that are needed, especially with UK inflation figures proving to be far stickier than in other countries.

September’s S&P US Manufacturing PMI declined to 47.0 MoM, falling to its lowest level since July of 2023 as the US manufacturing sector sees a continued gloomy outlook on business activity. On the other hand, the S&P US Services PMI eased to 55.4 in September, down from August’s 55.7 but beating the expected print of 55.2.

Fed policymaker and Chicago Fed President Austan Goolsbee hit markets with cooling comments early Monday, noting that much further movement on rates from the Fed could be necessary. The Fed official highlighted that the Fed may need to shoot much lower on policy rates in order to keep business lending conditions sufficiently liquid enough to keep the US business landscape keel-side down as record tightness in the US labor market drains away.

GBP/USD price forecast

Despite clipping into yet another consecutive fresh 30-month high on Monday, Cable bidders have struggled to push price action deeper into bull country, and markets will enter the midweek market sessions with prices hovering without a notable lack of technical support. A firm bullish trend is still baked into daily candlesticks with the pair climbing above the 50–day Exponential Moving Average (EMA) near 1.3000.

GBP/USD daily chart

• GBP/USD climbs as Flash PMIs from both UK and US indicate economic deceleration.
• The pair’s uptrend tests the top of an ascending channel, nearing key resistance at 1.3400.
• A dip below 1.3300 might prompt a correction to 1.3248 and 1.3200, with further supports at 1.3100 and 1.3001.

The Pound Sterling soars to new 2024 record high of 1.3355 versus the Greenback on Monday, rising over 0.20% as S&P Global Flash PMIs in the UK and the US show that both economies are slowing. Meanwhile, dovish comments by Chicago’s Fed President Austan Goolsbee weighed on the buck. The GBP/USD trades at 1.3350.

GBP/USD Price Forecast: Technical outlook

The GBP/USD daily chart hints that the uptrend is accelerating. It is testing the top of an ascending channel, which, if cleared, could pave the way to challenging the 1.3400 psychological figure.

The Relative Strength Index (RSI) portrays momentum favoring buyers. Hence, the GBP/USD might extend its gains in the short term.

If GBP/USD cleared 1.3400, the next resistance would be the March 1, 2022 peak at 1.3437. Once surpassed, the next ceiling level would be 1.3450, ahead of 1.3500.

Conversely, if GBP/USD retraces below 1.3300, this could pave the way for a correction. The first support will be the September 23 low of 1.3248, followed by the 1.3200 figure. On further weakness, the next stop wil be 1.3100, before diving to 1.3001 the September 11 cycle low.

GBP/USD Price Action – Daily Chart