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

The Pound Sterling (GBP) could dip towards 1.2940 again before a more sustained rebound is likely. In the longer run, GBP must break and remain below 1.2940 before a resumption of weakness can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

GBP must break and remain below 1.2940 to dip further

24-HOUR VIEW: “On Monday, GBP fell sharply. Yesterday (Tuesday), when GBP was at 1.2980, we were of the view that it ‘is likely to continue to weaken, even though the 1.2940 level is expected to provide strong support.’ During NY trade, GBP fell to a low of 1.2945 before rebounding. It then closed largely unchanged at 1.2985 (+0.01%). Downward momentum has increased slightly, but there is a chance for GBP to dip towards 1.2940 again before a more sustained rebound is likely. GBP is unlikely to break clearly below 1.2940. On the upside, should GBP break above 1.3015 (minor resistance is at 1.3000), it would mean that the current mild downward pressure has faded.”

1-3 WEEKS VIEW: “We highlighted yesterday (22 Oct, spot at 1.2980) that GBP ‘must break and remain below 1.2940 before a resumption of weakness can be expected.’ We also highlighted that ‘The likelihood of GBP breaking clearly below 1.2940 will remain intact, provided that the ‘strong resistance’ level at 1.3060 is not breached in the next couple of days.’ Our view remains unchanged.”

• GBP/USD may face challenges as the BoE is widely expected to deliver a 25 basis point rate cut in November.
• BoE Deputy Governor Sarah Breeden may participate in a panel discussion on financial regulation in Washington on Wednesday.
• Fed’s Daly stated that the economy is evidently in a stronger position, with a significant decline in inflation.

The GBP/USD pair edges higher toward 1.3000 during Asian trading on Wednesday. However, the Pound Sterling (GBP) faced headwinds due to declining consumer and producer inflation figures, coupled with weak labor market data in the United Kingdom (UK). These factors are fueling expectations that the Bank of England (BoE) may implement a 25 basis point rate cut in November, followed by another quarter-point cut in December.

On Tuesday, BoE Governor Andrew Bailey highlighted the need for the UK central bank to enhance its ability to monitor developments in the less transparent non-banking system. Speaking at a Bloomberg event in New York, Bailey noted, "We are approaching a point where we need to pivot from rule-making to surveillance" to better track financial activities outside the traditional banking sector.

Furthermore, BoE Deputy Governor Sarah Breeden is scheduled to participate in a panel discussion on financial regulation, organized by the Institute of International Finance (IIF) in Washington on Wednesday.

The US Dollar (USD) gains ground as Treasury yields rise due to the increasing likelihood of nominal rate cuts by the Federal Reserve (Fed). The US Dollar Index (DXY), which tracks the US Dollar against six major currencies, is trading near a two-month high at 104.20. Meanwhile, yields on 2-year and 10-year US Treasury bonds are at 4.05% and 4.23%, respectively.

In a post on the social media platform X, Federal Reserve Bank of San Francisco President Mary Daly stated that the economy is clearly in a better position, with inflation having fallen significantly and the labor market returning to a more sustainable path.

• GBP/USD scratched momentum on Tuesday, holding flat near 1.3000.
• BoE Governor Bailey made his first of four public outings on Tuesday.
• UK and US PMI figures due on Thursday.

GBP/USD held steady on Tuesday, testing the waters near the 1.3000 handle. Intraday price action tested a fresh nine-week low, and topside bidding failed to make a mark above 1.3000, keeping near-term momentum hobbled in a midrange just below the key handle.

Bank of England (BoE) Governor Andrew Bailey made his first of four appearances on the docket this week. BoE’s Bailey mostly stuck to the middle of recent scripts, though the BoE head did note some regret at the BoE’s complacency regarding recent financial stability risks.

With three more BoE Bailey appearances this week, Cable traders will keep track of any repetitious statements on Governor Bailey’s speech cards. BoE head Bailey has an appearance on the cards late Wednesday, then Pounsd traders will be pivoting to UK Purchasing Managers Index (PMI) figures coming up on Thursday.

Median market forecasts are expecting a slight downtick in UK activity numbers, with October’s Services PMI specifically expected to ease to 52.2 from 52.4 the previous month.

GBP/USD price forecast

The GBP/USD pair is facing increased selling pressure as it slips below the key psychological level of 1.3000. The pair is currently trading near 1.2980, hovering just above the 200-day exponential moving average (EMA) at 1.2846, which acts as a critical support zone. The 50-day EMA at 1.3085 is sloping downward, indicating that the near-term trend remains bearish. The downward momentum from the September highs near 1.3650 highlights a weakening of bullish strength, with lower highs and lower lows forming since mid-September, suggesting that bears are currently in control.

The MACD indicator paints a bearish picture as well, with the MACD line well below the signal line and the histogram extending deeper into negative territory. This signals further downside risk for the pair, especially if it breaks below the 200-day EMA. A decisive close below 1.2850 could accelerate the selling pressure, with the next support level emerging around 1.2750. On the flip side, a recovery above the 50-day EMA near 1.3085 would be needed to shift the sentiment back in favor of the bulls, though this appears unlikely in the short term given current technical conditions.

GBP/USD daily chart

• GBP/USD falls 0.15%, decisively breaking below the 1.3000 mark and testing the 100-DMA for the first time since August 2024.
• Momentum signals bearish control, with the RSI nearing recent lows, potentially pushing the pair toward the 1.2915/20 support zone.
• A break below 1.2915 could lead to a test of key support at 1.2798, while resistance lies at 1.2990 and the 50-DMA at 1.3135.

The Pound Sterling extended its losses against the US Dollar for two straight days, with sellers clearing the 1.3000 figure decisively, which could pave the way for further downside. At the time of writing, the GBP/USD trades at 1.2961, fluctuating around the 100-day moving average (DMA), down 0.15%.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is testing the 100-DMA for the first time since early August 2024. Although the pair hit a daily low of 1.2944, sellers lacked the strength to push the spot price toward the bottom trendline of an ascending channel.

Momentum shows that sellers are in charge. The Relative Strength Index (RSI) is dipping towards its most recent low, which, once broken, would signal bears to exert pressure on the pair.

If GBP/USD presses toward the bottom trendline and clears the support at around 1.2915/20, the exchange rate could likely hit 1.2900. The next key support level would be the confluence of the August 15 low and the 200-DMA at 1.2798

Conversely, if buyers stepped in and push the exchange rate past 1.2990, a move toward 1.3000 is on the cards. The next major resistance is found at the 50-DMA at 1.3135.

GBP/USD Price Chart – Daily

The Pound Sterling (GBP) is likely to continue to weaken; the 1.2940 level is expected to provide strong support. GBP must break and remain below 1.2940 before a resumption of weakness can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Weakness to resume after a break below 1.2940

24-HOUR VIEW: “After GBP rose last Friday, we highlighted yesterday (Monday) that ‘Despite the advance, there is no significant increase in momentum, and instead of continuing to rise, GBP is more likely to trade sideways between 1.3010 and 1.3070.’ The subsequent sharp drop that reached a low of 1.2978 was surprising. Today, GBP is likely to continue to weaken, even though the 1.2940 level is expected to provide strong support. Resistance is at 1.3000; a breach of 1.3020 would indicate that the current downward pressure has faded.”

1-3 WEEKS VIEW: “After holding a negative GBP stance since the start of the month, we turned neutral yesterday (21 Oct, spot at 1.3050), indicating that ‘the weakness in GBP has ended, and for the time being, it is likely to trade in a range between 1.2980 and 1.3130.’ We did not anticipate the subsequent sharp decline that reached a low of 1.2984. Downward momentum has increased, but not enough to suggest the resumption of GBP weakness. GBP must break and remain below 1.2940 before further declines can be expected. The likelihood of GBP breaking clearly below 1.2940 will remain intact, provided that the ‘strong resistance’ level at 1.3060 is not breached in the next couple of days.”

• GBP/USD may struggle as daily chart analysis suggests a bearish bias.
• The pair could find support around the lower boundary of the descending channel at 1.2810 level.
• The immediate barrier appears around the upper boundary of the descending channel at the nine-day EMA of 1.3040 level.

GBP/USD retraces its recent losses, trading around 1.3000 during the Asian hours on Tuesday. The daily chart analysis shows the pair is consolidating within the descending channel pattern, which suggests a bearish bias for the pair.

The Moving Average Convergence Divergence (MACD) indicator suggests bearish momentum, as the MACD line is positioned below the centreline and the signal line. Additionally, the 14-day Relative Strength Index (RSI) is below 50 level, reinforcing the ongoing bearish sentiment.

On the downside, the GBP/USD pair may navigate the area around the lower boundary of the descending channel at 1.2810, followed by the psychological level of 1.2800. A break below this level could put downward pressure on the pair to test the three-month low of 1.2665, which was recorded on August 8.

For resistance, the GBP/USD pair could test the upper boundary of the descending channel around the nine-day Exponential Moving Average (EMA) at the 1.3040 level. A break above this level could support the pair to approach the psychological level of 1.3100.

GBP/USD: Daily Chart

• GBP/USD shed half of a percent as the Pound’s recovery against the US Dollar abruptly ends.
• Looming BoE appearances and global PMI figures to keep Pound momentum capped this week.
• Investors bucked on Monday after Fed officials cautioned that the pace of rate cuts may slow.

GBP/USD twisted into the low side on Monday, kicking off the new trading week with a fresh test south of the 1.3000 handle as Cable traders balk ahead of a hectic week that sees a slew of appearances from central bank figures, as well as an update on global Purchasing Managers Index (PMI) figures. 

Pound Sterling traders will be keeping an eye out for an appearance from Bank of England (BoE) Governor Andrew Bailey on Tuesday. However, the BoE head’s comments will be coming much later in the day as Bailey will be delivering speech notes at the Bloomberg Global Regulatory Forum in New York during the early US market session.

Global PMI figures are slated for a rolling release on Thursday, with UK figures kicking off the Cable docket. Median market forecasts are expecting a slight downtick in UK activity numbers, with October’s Services PMI specifically expected to ease to 52.2 from 52.4 the previous month.

GBP/USD price forecast

The GBP/USD pair continues to trade with a bearish bias, currently hovering near 1.2982 after failing to hold above the 1.3000 psychological level. The price is trading below the 50-day EMA at 1.3089, signaling that the bears are in control of the short-term trend. The next key support lies at 1.2845, where the 200-day EMA resides, offering potential downside protection. If sellers maintain pressure, a break below this long-term support could accelerate further losses towards 1.2800.

The MACD indicator paints a weak picture, with the histogram showing expanding negative momentum as the MACD line remains below the signal line, reinforcing the bearish outlook. Bulls are struggling to regain traction, and the pair's failure to break above the 50-day EMA adds to the downside risks. A daily close below 1.2900 could further confirm the bearish sentiment, while a bounce back above 1.3100 is needed to restore the pair's upside potential.

GBP/USD daily chart

• GBP/USD begins the week down, struggling to hold above 1.3000.
• Sellers eye key support at last week’s low of 1.2973, with further downside targets at the 100-DMA and the 200-DMA, each at 1.2959 and 1.2796.
• Buyers must reclaim 1.3100 to challenge the 50-DMA at 1.3133 and aim for the YTD high of 1.3434.

The Pound Sterling is losing some ground against the Greenback. Increasing tensions in the Middle East are spurring a risk-off environment despite China’s efforts to propel its economy. At the time of writing, the GBP/USD trades at 1.2997, down 0.38%.

GBP/USD Price Forecast: Technical outlook

The GBP/USD begins the week on the back foot after opening at around 1.3039. Since then, the pair hit a 1.3057 high before sliding beneath the 1.3000 mark.

Momentum suggests that sellers are in charge, as portrayed by the Relative Strength Index (RSI). However, they must clear last week’s low of 1.2973 before challenging the 100-day moving average (DMA) at 1.2959, aiming to push prices toward the 200-DMA at 1.2796.

On the other hand, buyers must lift the GBP/USD spot price above 1.3100 so they can test the 50-DMA at 1.3133 as they prepare to challenge the year-to-date (YTD) high at 1.3434.

GBP/USD Price Action – Daily Chart

Rightmove House Price data for October were released over the weekend and showed a moderate (0.3%) rise in house prices last month, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP holds trading range around 1.30

“Prices were up 1.0% in the year (down a little from September’s 1.2% gain). Sterling is just along for the ride this morning, tracking losses among the core majors against the USD absent any market-moving news.”

“Cable is soft but holding within its recent trading range. The technical undertone remains weak, leaving spot prone to renewed losses and a retest of last week’s 1.2974 low. Resistance (minor bull trigger potentially) is 1.3065 on the day.”

The Pound Sterling (GBP) is likely to trade sideways between 1.3010 and 1.3070. In the longer run, weakness from the start of the month has ended; GBP is likely to trade between 1.2980 and 1.3130 for the time being, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

GBP bulls can try to break above 1.3070

24-HOUR VIEW: “Last Friday, we expected GBP to trade in a 1.2985/1.3050 range. However, it rose to 1.3070, closing higher by 0.29% at 1.3048. Despite the advance, there is no significant increase in momentum. Instead of continuing to rise, GBP is more likely to trade sideways between 1.3010 and 1.3070.”

1-3 WEEKS VIEW: “In our most recent narrative from last Thursday (17 Oct, spot at 1.2990), we indicated that ‘the breach of the major support at 1.3000 sets the stage for further losses.’ We added, ‘Only a breach of 1.3080 (‘strong resistance’ level) would indicate that the weakness from early this month has ended.’ GBP rebounded strongly on Friday, reaching a high of 1.3070. Although our ‘strong resistance’ level has not been breached yet, downward momentum has largely faded. In other words, the weakness in GBP has ended, and for the time being, it is likely to trade in a range between 1.2980 and 1.3130.”

• GBP/USD edges lower at the start of a new week amid a modest USD strength.
• The fundamental backdrop supports prospects for a further depreciating move.
• A slide towards the 1.2960 confluence support looks like a distinct possibility.

The GBP/USD pair struggles to capitalize on a two-day-old recovery move from the 1.2975 area, or a nearly two-month trough touched last Thursday and kicks off the new week on a softer note. Spot prices currently trade just below mid-1.3000s and seem vulnerable to prolonging the recent pullback from the 1.3435 region, or the highest level since March 2022.

The US Dollar (USD) attracts some dip-buyers at the start of a new week and reverses a part of Friday's losses amid expectations that the Federal Reserve (Fed) will proceed with modest rate cuts over the next year. The British Pound (GBP), on the other hand, is undermined by rising bets for interest rate cuts by the Bank of England (BoE) in November and December. This, in turn, adds credence to the near-term negative outlook for the GBP/USD pair. 

From a technical perspective, the recent breakdown through the 50-day Simple Moving Average (SMA) and the subsequent fall below the 50% Fibonacci retracement level of the August-September upswing was seen as a fresh trigger for bears. Furthermore, oscillators on the daily chart are holding in negative territory and are still away from being in the oversold territory, suggesting that the path of least resistance for the GBP/USD pair is to the downside.

Hence, some follow-through weakness back below the 1.3000 psychological mark, towards testing the 1.2960-1.2955 confluence support, looks like a distinct possibility. The latter comprises the 100-day SMA and the 61.8% Fibo. level, which if broken should pave the way for a slide towards the 1.2900 round figure en route to the 1.2860 horizontal support. 

On the flip side, attempted recovery beyond the 1.3100 mark is likely to confront resistance near the 1.3135 region, or the 38.2% Fibo. level. The said hurdle now coincides with the 50-day SMA and should act as a key pivotal point. A sustained strength beyond might shift the bias in favor of bullish traders and allow the GBP/USD pair to reclaim the 1.3200 mark. The move up could extend further towards the 1.3250 strong horizontal support breakpoint.

GBP/USD daily chart

• GBP/USD remains close to a one-month low touched last week amid a bullish USD.
• Bets for a less aggressive Fed policy easing and geopolitical risks underpin the buck.
• Expectations for a faster BoE rate-cutting cycle weigh the GBP and favor bears.

The GBP/USD pair struggles to capitalize on modest recovery gains registered over the past two days and oscillates in a narrow range, around the 1.3050-1.3045 region during the Asian session on Monday. Spot prices remain well within striking distance of a one-month low touched last Thursday and seem vulnerable to prolong the recent retracement slide from the 1.3435 area, or the highest level since March 2022.

A surprise fall in the UK Consumer Price Index (CPI) to the lowest level since April 2021 and below the Bank of England's (BoE) 2% target lifted bets for a 25 basis point (bps) interest rate cut at the November 7 meeting. Furthermore, the money markets are pricing in the possibility of another BoE rate cut in December, which might continue to undermine the British Pound (GBP). This, along with the underlying bullish sentiment surrounding the US Dollar (USD) validates the negative outlook for the GBP/USD pair. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, kicks off the new week on a positive note and for now, seems to have stalled its modest pullback from its highest level since early August touched last week. Growing market conviction that the Federal Reserve (Fed) will proceed with modest rate cuts over the next year keep the US Treasury bond yields elevated and act as a tailwind for the buck. Apart from this, geopolitical risks turn out to be another factor underpinning the safe-haven USD. 

In the absence of any relevant market-moving economic releases, either from the UK or the US, the aforementioned fundamental backdrop suggests that the path of least resistance for the GBP/USD pair is to the downside. Hence, any intraday move-up could be seen as a selling opportunity. Bearish traders, however, might wait for acceptance below the 1.3000 psychological mark before placing fresh bets and positioning for a slide towards the 100-day Simple Moving Average (SMA) support, currently near the 1.2960 region.

• GBP/USD found the gas for a thin rally on Friday.
• Upbeat UK Retail Sales figures helped the Pound find its footing.
• A broad-market pivot out of the Greenback further aided Dollar pairs.

GBP/USD extended a near-term recovery rally to wrap up the trading week, inching back in a familiar congestion zone and clawing back meager gains from the midweek’s backslide into the 1.3000 handle. The Pound Sterling was bolstered by better-than-expected UK Retail Sales figures, with gains further buoyed by a broad-market easing in Greenback bidding.

UK Retail Sales bounced 0.3% in September, falling back from August’s 1.0% but still sticking well above the expected -0.3% contraction. After a raft of bad data from the UK, GBP bidders got the break they needed. Cable bulls will now have to settle in for the long wait to next week’s UK Purchasing Managers Index (PMI) figures, due next Thursday.

US housing and construction figures came in moderately mixed on Friday, further entrenching investors in a buying mood and further crushing any fears of an economic slowdown right around the corner. The US’ “soft landing” scenario appears to have been fully averted with growth and activity metrics easily beating expectations, and upbeat Retail Sales figures releases earlier this week further make the case.

GBP/USD price forecast

GBP/USD has shown some resilience near the 1.3000 level after bouncing from recent lows, but the recovery remains constrained by the 50-day Exponential Moving Average (EMA) at 1.3094, which now acts as a key resistance. The pair is currently trading at 1.3052, and a successful break above the 50-day EMA would signal a stronger bullish reversal. However, the broader outlook remains neutral to bearish as long as the pair trades below the 1.3100 resistance zone. A failure to clear this level could bring the bears back into play, with the 200-day EMA at 1.2844 acting as a critical support level.

The Moving Average Convergence Divergence (MACD) indicator remains in bearish territory, with the signal line below the MACD line, indicating that downside pressure persists. However, the histogram is showing signs of narrowing, which could suggest a potential shift in momentum in the near term. A sustained move above the 50-day EMA could pave the way for a test of the 1.3150 and 1.3200 levels, but failure to break higher could lead to renewed selling, targeting the 1.2900 support zone. Traders should watch for a clear directional break to confirm the next move.

GBP/USD daily chart

• GBP/USD rebounds from a weekly low of 1.2974, driven by stronger-than-expected UK Retail Sales data.
• Momentum favors sellers, but a break above 1.3102 could lead to further gains, with resistance at 1.3129 and 1.3175.
• A daily close below 1.3100 may expose the pair to downside risks, with key support at 1.3000 and the 100-DMA at 1.2957.

The Pound Sterling resumed its uptrend after hitting a weekly low of 1.2974 on Wednesday. It surged after the UK Retail Sales data was stronger than foreseen by market analysts, portraying a robust economy. Nevertheless, traders remain convinced that the Bank of England (BoE) would lower rates as inflation fell below the bank’s 2% target. At the time of writing, the GBP/USD trades at 1.3036.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is upward biased, though downside risks remain unless the pair clears the October 15 high at 1.3102. Failure to do so could cause sellers to remain hopeful of lowering spot prices.

As of late, momentum suggests that sellers are in charge. The Relative Strength Index (RSI) is bearish, though it aims higher, but it is far from reaching neutral readings.

If GBP/USD surpasses 1.3102, buyers will face stir resistance at the 50-day moving average (DMA) at 1.3129. A breach of the latter will expose the October 4 peak at 1.3175, ahead of 1.3200.

Conversely, a daily close below 1.3100 could pave the way for further downside. The first support would be the 1.3000 figure, followed by the weekly low of 1.2974. Below lies the 100-DMA at 1.2957, followed by the 1.2900 mark.

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) firmed somewhat and UK yields rose in response to stronger than expected UK Retail Sales data for September, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

GBP firms modestly on USD and EUR

“Sales rose 0.3% in the month, versus expectations of a 0.4% decline. Swaps pricing for the November BoE policy decision is little changed, however, with a quarter point cut still fully reflected in the market. EUR/GBP dipped below 0.83 briefly following the data but gains have been trimmed back somewhat over the course of the European morning session.”

“GBP continues to attract support on dips—although spot losses have extended a little below the potential base that was developing earlier this week.”

“Spot has eased back from its intraday high near 1.3075 made earlier in the session but a second net daily gain today would bolster short-term chances of a more sustained push above 1.31 and perhaps push on to test firmer resistance around 1.3175/00 into next week.”

The Pound Sterling (GBP) is expected to trade in a 1.2985/1.3050 range. In the longer run, the breach of the major support at 1.3000 sets the stage for further losses; the levels to monitor are 1.2940 and 1.2900, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notes.

Levels to monitor are 1.2940 and 1.2900

24-HOUR VIEW: “Our expectation for GBP ‘decline further to 1.2940’ did not turn out, as it traded between 1.2971 and 1.3023, closing at 1.3010. The price movements appear to be part of a consolidation phase. Today, we expect GBP to trade in a 1.2985/1.3050 range.”

1-3 WEEKS VIEW: “After GBP breached the major support at 1.3000, we indicated yesterday (17 Oct, spot at 1.2990) that ‘the breach of the major support at 1.3000 sets the stage for further losses.’ We added, ‘the levels to monitor are 1.2940 and 1.2900.’ Our view remains unchanged, even though oversold short-term conditions could lead to a couple of days of consolidation. Overall, only a breach of 1.3080 (no change in ‘strong resistance’ level) would indicate that the weakness from early this month has ended.”

• GBP/USD recovers further from a two-month low, albeit the upside potential seems limited.
• The USD bulls opt to take some profits off the table, which, in turn, lends support to the pair.
• An unexpected fall in the UK inflation reaffirms bets for more BoE rate cuts and caps the GBP.

The GBP/USD pair attracts some follow-through buying during the Asian session on Friday and looks to build on the overnight bounce from the 1.2975-1.2970 region, or a two-month low. Spot prices currently trade around the 1.3020-1.3025 area, up 0.10% for the day amid a modest US Dollar (USD) downtick, though any meaningful appreciating move still seems elusive. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, pulls back from its highest level since early August as traders opt to take some profits off the table following a strong rally since the beginning of this month. That said, growing acceptance that the Federal Reserve (Fed) will proceed with modest rate cuts over the next year should limit the USD losses and cap the GBP/USD pair. 

Furthermore, a surprise fall in the UK Consumer Price Index (CPI) to the lowest level since April 2021 and below the Bank of England's 2% target paves the way for further interest rate cuts. In fact, the money markets are now pricing in over a 90% chance that the UK central bank will lower borrowing costs by 25 basis points (bps) at its upcoming meeting in early November and cut rates again in December. 

This might further hold back traders from placing aggressive bullish bets around the British Pound (GBP) and contribute to keeping a lid on the GBP/USD pair. Hence, it will be prudent to wait for strong follow-through buying before confirming that the recent retracement slide from the 1.3435 region, or the highest level since March 2022 touched last month has run its course and positioning for further gains.

Traders now look to the release of UK Retail Sales for some impetus ahead of the US housing market data – Building Permits and Housing Starts later during the early North American session. This, along with Fed Governor Christopher Waller's speech, will influence the USD and produce short-term opportunities around the GBP/USD pair, which seems poised to register losses for the third successive week.

• GBP/USD pumped the brakes on recent declines, but upside remains elusive.
• UK economic data has given Pound bulls little to be bullish about.
• US data, on the other hand, continues to outpace expectations.

GBP/USD managed to plug the leaks and stop its most recent backslide, but potential for a bullish rebound remains tepid at best. The Pound Sterling clawed back a scant sixth of a percent against the Greenback on Thursday, well short of the midweek plunge that saw Cable slump another six-tenths of a percent.

GBP/USD remains off of recent highs by over 3% after a one-sided backslide from its last peak near 1.3450. The pair is once again battling it out near the 1.3000 handle as GBP bidders struggle to find a reason to buy Cable.

UK data has broadly missed the mark this week, with UK Consumer Price Index (CPI) inflation, Producer Price Index (PPI) inflation, and UK labor figures all undershot market forecasts. With UK inflation flopping steeper than many expected, and jobs data failing to hit investor expectations, the Bank of England (BoE) will face increasing pressure from markets to step up the pace of rate cuts.

All that’s left of note on the GBP side of this week’s economic data docket will be Friday’s UK Retail Sales figures. Even here, markets aren’t expecting much in the way of magic, with median market forecasts expecting a -0.3% contraction in September compared to August’s comparatively strong showing of 1.0%.

US data, on the other hands, broadly rewarded Greenback bidders. US Retail Sales grew by 0.4% MoM in September, recovering from August’s 0.1% and beating median market forecasts of a 0.3% print. Retail Sales excluding Automotive spending also thumped forecasts, growing by 0.5% in September compared to the expected 0.1%, and easily vaulting over August’s 0.2% increase.

US Initial Jobless Claims for the week ended October 11 also beat market expectations, coming in at 241K for the week. Investors expected the week’s new jobless claimant count to hold steady at the previous week’s revised 260K.

GBP/USD price forecast

GBP/USD remains under selling pressure as the pair consolidates just above the 1.3000 psychological level, having recently broken below the 50-day Exponential Moving Average (EMA) at 1.3096. This bearish break signals a potential continuation of the downward trend, with the 200-day EMA at 1.2841 serving as a critical support level in the near term. Despite the current mild rebound, bearish sentiment remains dominant, and any recovery could face resistance near the 50-day EMA, now acting as a dynamic resistance point. A failure to reclaim 1.3050 could attract further selling interest.

The Moving Average Convergence Divergence (MACD) indicator is flashing warning signs of deeper downside risk, as both the MACD line and the signal line remain in negative territory. The histogram is showing signs of weakening bearish momentum, but the overall bias remains to the downside. A sustained break below 1.3000 could open the door toward the 1.2900 handle, with a further drop potentially targeting the 200-day EMA. Conversely, any recovery above the 1.3050 level would be needed to invalidate the bearish outlook, with a potential upside target of 1.3150.

GBP/USD daily chart

• GBP/USD slips below the 50-DMA, signaling a bearish shift despite its recent recovery towards 1.3000.
• Bearish momentum in the RSI hints at a deeper correction if the pair closes below 1.3000 consecutively.
• Key support levels include the 100-DMA at 1.2954 and the bottom of the ascending channel around 1.2890/1.2910.

The Pound Sterling recovered some ground yet cannot hold firm above the 1.3000 figure against the Greenback. Absent data releases in the UK kept traders adrift to a goodish US Retail Sales report, along with a dip in unemployment claims. At the time of writing, the GBP/USD trades at 1.2991, virtually unchanged.

GBP/USD Price Forecast: Technical outlook

Price action suggests the GBP/USD is still upwardly biased, but since it has fallen below the 50-day moving average, it has opened the door for lower prices.

From a momentum standpoint, the Relative Strength Index (RSI) is bearish. Hence, if the GBP/USD achieves back-to-back daily closes below 1.3000, it could be headed for a deeper pullback.

Given the backdrop, the first support for GBP/USD would be the 100-DMA at 1.2954. Once cleared, the next support would be the bottom trendline of an ascending channel at around 1.2890/1.2910, followed by the June 12 peak turned support at 1.2861. The next support would be the 200-DMA at 1.2794.

Conversely, if GBP/USD holds firm above 1.3000, buyers can drive the exchange rate towards the weekly high of 1.3102 before testing the 50-DMA at 1.3122.

GBP/USD Price Action – Daily Chart