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

• GBP/USD consolidates Wednesday’s softer UK CPI-inspired fall to over a two-month low.
• Bets for a BoE rate cut in November weigh on the GBP and the major amid a bullish USD.
• Hopes for a less aggressive Fed policy easing favor the USD bulls ahead of the US data.

The GBP/USD pair remains below the 1.3000 psychological mark during the Asian session on Thursday and is currently placed near its lowest level since August 20 touched the previous day. Meanwhile, the fundamental backdrop seems tilted firmly in favor of bearish traders and suggests that the path of least resistance for spot prices is to the downside. 

Data published on Wednesday showed that the annual UK Consumer Price Index (CPI) decelerated from 2.2% in August to 1.7% last month, marking the lowest reading since April 2021. The data lifted bets for an interest rate cut by the Bank of England (BoE) in November, which continues to undermine the British Pound (GBP). Apart from this, the recent US Dollar (USD) rally, to the highest level since early August, validates the near-term negative outlook for the GBP/USD pair. 

Investors now seem convinced that the Federal Reserve (Fed) will proceed with modest interest rate cuts over the next year. This keeps the yield on the benchmark 10-year US government bond above the 4% threshold and continues to underpin the USD. Apart from this, persistent geopolitical risks stemming from the ongoing conflicts in the Middle East benefit the Greenback's relative safe-haven status and support prospects for a further depreciating move for the GBP/USD pair. 

Even from a technical perspective, the overnight breakdown below a one-week-old trading range and acceptance below the 1.3000 psychological mark add credence to the bearish setup. Hence, some follow-through weakness towards the 100-day Simple Moving Average (SMA) support near the 1.2955 region, en route to the 1.2900 mark, looks like a distinct possibility. Traders now look forward to the US macro releases for some impetus later during the early North American session. 

Thursday's US economic docket features monthly Retails Sales report, the usual Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Industrial Production data. This, along with the US bond yields and geopolitical developments, will drive the USD demand and produce short-term trading opportunities around the GBP/USD pair.

• GBP/USD backslid another two-thirds of one percent on Wednesday.
• Cable shed more weight after UK CPI inflation figures missed the mark.
• US & UK Retail Sales figures go head-to-head with releases on Thursday and Friday, respectively.

Tension snapped in GBP/UISD chart action on Wednesday, with Cable losing the tug of war and backsliding out of recent congestion. Cable tumbled two-thirds of one percent and slipped below the 1.3000 handle during the midweek market session. GBP markets withered after UK Consumer Price Index (CPI) inflation figures missed the mark, sending the Pound Sterling to a fresh eight-week low.

UK CPI inflation number widely missed median market forecasts as inflation drops faster and further than investors initially anticipated in September. Headline CPI inflation for the year ended in September eased to 1.7% from 2.2%, with markets expecting a print of 1.9%. Core CPI inflation remains stubbornly higher than headline inflation measures, but still eased faster than expected, dipping to 3.2% YoY from the previous 3.6% and wringing extra out of the forecast 3.4%.

The UK is witnessing its slowest pace of annual inflation growth since May of 2021, and rising concerns of a deepening economic slowdown are dragging Cable lower. UK Producer Price Index (PPI) figures also contracted more than expected in September, with headline PPI Output prices swooning -0.7% YoY, below the forecast -0.6% and eating away the previous 0.2%. The UK Retail Price Index also hit its lowest measure since April of 2021, falling to 2.7% YoY compared to the previous period’s 3.5% and the median market forecast of 3.1%.

Up next on the data docket will be Thursday’s US Retail Sales. Markets are expecting an improvement in US retailer volumes, forecasting a MoM uptick of 0.3% in September Retail Sales compared to August’s 0.1% print.

The UK’s last chance to impress traders will come on Friday, when UK Retail Sales figures get released. Unfortunately, investors aren’t expecting much; September’s UK Retail Sales are forecast to slump to -0.3% MoM from the previous 0.1%.

GBP/USD price forecast

GBP/USD is set to close for a third straight week in the red as long as Greenback bulls can keep their hands on the wheel for the back half of the trading week. The pair has declined nearly 3.5% after hitting multi-month highs near 1.3450 in September, and the loss of the 1.3000 handle serves as a last-chance wakeup call for Pound Sterling bidders.

GBP/USD daily chart

• GBP/USD drops 0.34%, reaching a low of 1.2981 after soft UK inflation report shocks markets.
• A close below 1.3000 could lead the pair to test the 100-DMA at 1.2951 and further support levels.
• If bulls regain control, resistance at 1.3100 and the 50-DMA at 1.3118 are key upside targets.

The Pound Sterling dived following a softer-than-expected UK inflation report, which dragged the GBP/USD exchange rate to a two-month low of 1.2981. Although it has recovered some ground, the pair is losing 0.49% and trades at 1.3008 at the time of writing.

GBP/USD Price Forecast: Technical outlook

After clearing the October 14 swing low of 1.3029, the GBP/USD accelerated its fall beneath 1.3000, which could pave the way for further downside.

Momentum supports sellers, as depicted by the Relative Strength Index (RSI), which broke the last trough, indicating the downtrend is accelerating.

If GBP/USD achieves a daily close below 1.3000, this could potentially send the pair to challenge the 100-day moving average (DMA) at 1.2951. On further weakness, the next stop would be the March 8 high turned support at 1.2894. If surpassed, the pair might extend its losses to the 200-DMA at 1.2793.

However, if buyers push the exchange rate past today’s high at 1.3076, and a move to 1.3100 is on the cards. Once cleared, the 50-DMA would be the next resistance level at 1.3118.

GBP/USD Price – Daily Chart

There has been no further increase in momentum; a breach of 1.3125 would suggest that 1.3000 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

GBP can break above of 1.3125

24-HOUR VIEW: “Yesterday, we expected GBP to trade in a sideways range of 1.3035/1.3085. GBP subsequently dipped to 1.3038, rebounded to 1.3103 before closing slightly higher at 1.3074 (+0.10%). There has been no increase in either downward or upward momentum, and we continue to expect GBP to trade sideways. Expected range for today: 1.3040/1.3105.”

1-3 WEEKS VIEW: “We have held a negative GBP view for two weeks now (see annotations in the chart below). After GBP fell to 1.3011 and rebounded, we highlighted last Friday (11 Oct, spot at 1.3060) that ‘despite the decline, there has been no further increase in downward momentum’. We added, only a breach of 1.3125 (‘strong resistance’ level) would suggest that 1.3000 is out of reach this time around. GPB traded sideways over the past few days, and we continue to hold the same view for now.”

• GBP/USD remains confined in a familiar range held over the past week or so.
• Traders opt to wait on the sidelines ahead of the release of the UK CPI report.
• The technical setup favors bears and supports prospects for further losses.

The GBP/USD pair extends its sideways consolidative price move on Wednesday and remains confined in a familiar range held over the past week or so. Spot prices currently trade around the 1.3070-1.3075 region, nearly unchanged for the day, as traders opt to wait on the sidelines ahead of the UK consumer inflation figures. 

Heading into the key data risk, speculation that the Bank of England (BoE) might be headed towards speeding up its rate-cutting cycle continues to undermine the British Pound (GBP) and act as a headwind for the GBP/USD pair. That said, a modest US Dollar (USD) downtick offers some support to the currency pair and helps limit the downside. 

From a technical perspective, the range-bound price action might still be categorized as a bearish consolidation phase against the backdrop of the recent pullback from the 1.3435 area, or the highest level since March 2022 touched last month. Furthermore, oscillators on the daily chart are holding in negative territory and are still far from being in the oversold zone. 

This, in turn, suggests that the path of least resistance for the GBP/USD pair remains to the downside. Hence, a subsequent slide to the 1.3020 area, or a one-month low touched last Thursday, en route to the 1.3000 psychological mark, looks like a distinct possibility. The downfall could extend towards the 100-day Simple Moving Average (SMA), around mid-1.2900s.

On the flip side, the 1.3100 round figure is likely to act as an immediate hurdle ahead of the 1.3125 horizontal zone. A sustained strength beyond the latter might trigger a short-covering rally and allow the GBP/USD pair to aim to reclaim the 1.3200 mark. Spot prices could climb further towards the next relevant hurdle near the 1.3235-1.3240 region.

GBP/USD daily chart

• GBP/USD churned just north of 1.3000 for a fourth straight trading day.
• UK labor figures were a non-starter on Tuesday.
• Cable markets are awaiting Wednesday’s upcoming UK CPI inflation update.

GBP/USD churned chart paper in familiar territory for a fourth consecutive trading day on Tuesday. Cable continues to cycle in a dead zone between 1.3100 and 1.3000 as GBP traders await meaningful UK data updates before picking a side to fall on.

UK wages data largely came in as expected on Tuesday, but GBP traders took note of an unexpected uptick in September’s Claimant Count Change, which jumped to 27.9K for the month, compared to the expected 20.2K against August’s 23.7K. On the other side of the same coin, the UK’s ILO Unemployment Rate also ticked down to 4.0% from the expected hold at 4.1%.

Wednesday’s upcoming UK Consumer Price Index (CPI) inflation figures are expected to broadly move lower in September. Headline CPI inflation for the year ended in September is forecast to fall to 1.9% YoY versus the previous period’s 2.2%. Core annualized CPI inflation, meanwhile, is forecast to tick down to 3.4% YoY from the previous 3.6%.

Greenback traders will be looking out for Thursday’s US Retail Sales figures for September, with the UK’s own Retail Sales print slated for Friday. US Retail Sales are expected to bounce to 0.3% MoM in September versus the previous 0.1%, while the UK’s own September Retail Sales figures are forecast to fall into contraction territory, from 0.1% to -0.3%.

GBP/USD price forecast

GBP/USD continues to churn in a volatility trap, squeezed between the 1.3000 major price handle and the 50-day Exponential Moving Average (EMA) falling into 1.3100. Technical indicators have become mired in near-term congestion warnings as Cable flounders on the low end of a pullback from late September’s peaks just north of 1.3400.

GBP/USD daily chart

• GBP/USD climbs 0.18% after strong UK jobs report shows over 373,000 jobs added, beating forecasts.
• Despite upward momentum, the pair remains within the 1.3000-1.3100 range, testing key resistance levels.
• Break above the 50-day moving average at 1.3112 could open the path to the 1.3174 October high.

The Pound Sterling recovered some ground and rose 0.18% on Tuesday against the US Dollar following a strong UK jobs report that pushed the unemployment rate lower, while the economy added over 373,000 jobs, crushing estimates of 250,000. At the time of writing, the GBP/USD trades at 1.3081 after bouncing off the daily low of 1.3035.

GBP/USD Price Forecast: Technical outlook

The GBP/USD remains consolidated, within the 1.3000-1.3100 range for the sixth consecutive day, even though the pair hit a high of 1.3102.

Momentum remains slightly bearish, as shown by the Relative Strength Index (RSI), but as the RSI edges toward its 50-neutral line, it could pave the way for further upside.

If GBP/USD strengthens further, the next stop would be the 50-day moving average (DMA) at 1.3112. Once surpassed, buyers could target the October 4 daily high at 1.3174, ahead of the 1.3200 figure.

On the other hand, if GBP/USD stays below 1.3100, this could expose the 1.3050 psychological level. The next support would be the October 10 swing low of 1.3010, followed by the September 11 daily low of 1.3001.

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) is likely to trade sideways, probably in a range of 1.3035/1.3085. In the longer run, there has been no further increase in momentum; a breach of 1.3125 would suggest that 1.3000 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Breach of 1.3125 to suggest that 1.3000 is out of reach

24-HOUR VIEW: “We highlighted yesterday that ‘provided that GBP remain below 1.3090 with minor resistance at 1.3070, it is likely to decline.’ We added, ‘the major support at 1.3000 is probably out of reach (there is another support level at 1.3025).’ GBP subsequently declined to 1.3031 before rebounding to close largely unchanged (1.3061, -0.05%). The price movements did not result in any increase in downward momentum, and GBP is likely to trade sideways today, probably in a range of 1.3035/1.3085.”

1-3 WEEKS VIEW: “We have held a negative GBP view for more than a week (see annotations in the chart below). After GBP fell to 1.3011 and rebounded, we highlighted last Friday (11 Oct, spot at 1.3060) that ‘despite the decline, there has been no further increase in downward momentum’. We added, only a breach of 1.3125 (‘strong resistance’ level) would suggest that 1.3000 is out of reach this time around. We continue to hold the same view.”

• GBP/USD edges close to the 1.3000 line in the sand on USD strength. 
• The US Dollar strengthens as markets continue dialing back bets of aggressive interest-rate cuts by the Fed. 
• The Pound Sterling, however, finds a foothold from strong UK employment data. 

GBP/USD edges lower into the 1.3040s on Tuesday as a result of continued US Dollar (USD) strength, which comes from reduced bets the US Federal Reserve (Fed) will need to be as aggressive at slashing interest rates as previously thought. 

The US economy is holding up better than expected and from once fearing a hard landing, or recession, passengers on the US enterprise are entertaining the possibility of “no-landing”. This suggests policymakers will not need to reduce interest rates as sharply as anticipated to stimulate the economy. The expectation that interest rates will remain elevated swells foreign capital inflows, which, in turn, increases demand for USD.  

GBP/USD fails to rise on positive UK jobs data 

GBP/USD is sliding lower despite just-released UK jobs data coming out relatively positive – something which would normally have been expected to strengthen the Pound Sterling (GBP) and elevate the Cable. 

The Unemployment Rate fell to 4.0% in the three months to August from 4.1% in the previous three months, and beat expectations of the same (4.1%). The Employment Change showed a 373K rise over the same period from 265K previously, and average earnings rose in line with expectations. The only data point to cause concern was the September Claimant Count, which rose to 27.9K from 23.7K in August, and beat expectations of 20.2K. 

Cable movers on the calendar

GBP/USD’s main market-moving events on Tuesday are likely to be verbal rather than data-driven. They consist mainly of speeches from three Fed officials, including San Francisco Fed’s President Mary Daly, Fed Governor Adriana Kugler and Atlanta Fed’s President Raphael Bostic. 

On the data side, The NY Empire State Manufacturing Index is the metric-of-the-day, though it is unlikely to move the needle much on the Greenback. 

A long list of UK data releases promises to paint Wednesday red, white and blue, with UK broad inflation metric the Consumer Price Index (CPI) and “factory-gate” inflation gauge the Producer Price Index (PPI) both scheduled for release. These may impact the Pound Sterling because they affect the Bank of England’s (BoE) decisions on interest rates. 

Inflation data for September will be particularly important because BoE officials have signaled they could resume cutting rates at the next meeting on November 7. 

Technical Analysis: GBP/USD reaches the bottom of the slope

GBP/USD reaches the bottom of its slope and pauses for refreshment. The pair has steadily been going downhill since the late September highs when it crested in the 1.3400s. Since then, the Pound has depreciated four cents to find itself back in the 1.3000s. 

GBP/USD Daily Chart 

Firm support is close at hand at around the 1.3005 level (thick charcoal line on chart) supplied by former peaks and troughs. The pair could either bounce and recover or break below the ice and sink. 

The short-term trend is bearish but the medium and longer-term trends are bullish. A close below 1.3000 would be a necessary prerequisite for expecting the near-term downtrend to extend. Support from a trendline then comes in quite soon after at 1.2950 and could spoil the bear-themed party. A break below that would then be necessary to expect even more weakness. 

The Relative Strength Index (RSI) is low but not oversold, so more downside is possible from a momentum perspective. 

Price action has not formed any bullish reversal candlestick patterns yet so it’s too soon to call a recovery either. There is a chance one could evolve, however, given the medium and longer-term trends are bullish so broader upcycles could kick in.

• GBP/USD remains subdued after the release of the mixed UK employment data on Tuesday.
• The UK ILO Unemployment Rate (3M) (Aug) eased to 4.0%, down from July’s 4.1% reading.
• Fed’s Kashkari reiterated the central bank’s data-dependent approach, highlighting the ongoing easing of inflationary pressures alongside a strong labor market.

GBP/USD edges lower after registering gains in the previous two sessions, trading around 1.3040 during the Asian trading hours on Tuesday. The pair remains subdued following the mixed employment data release from the United Kingdom (UK).

The UK ILO Unemployment Rate eased to 4.0% in the three months leading up to August, down from July’s 4.1% reading and below the market forecast of 4.1%. Employment Change for August showed an increase of 373,000, up from 265,000 in July. Meanwhile, Average Earnings excluding Bonuses rose by 4.9% year-on-year in the three months to August, in line with expectations, though slightly lower than the 5.1% growth recorded in July.

The US Dollar (USD) gains support from increasing expectations that the US Federal Reserve (Fed) will avoid aggressive interest rate cuts, following a strong jobs report and concerns of sticky US inflation. According to the CME FedWatch Tool, markets are currently pricing in an 88.2% probability of a 25-basis-point rate cut in November, with no anticipation of a larger 50-basis-point reduction.

On Monday, Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari reaffirmed the Fed's data-dependent approach. Kashkari reiterated familiar Fed policymaker views on the strength of the US economy, noting continued easing of inflationary pressures and a robust labor market, despite a recent uptick in the overall unemployment rate, per Reuters.

• GBP/USD continues to battle markets just above 1.3000.
• Cable traders are buckling down ahead of Tuesday’s key UK labor figures.
• UK CPI inflation, US Retail Sales figures due later in the week.

GBP/USD churned chart paper just north of 1.3000 on Monday, with markets striking a laid-back tone ahead of key UK data due to release in the first half of the trading week. UK wages and jobs additions are slated for early Tuesday, with UK Consumer Price Index (CPI) and Producer Price Index (PPI) inflation in the barrel for Wednesday. US Retail Sales figures will round out the middle of the week on Thursday, followed by UK Retail Sales slated for Friday’s London market session.

Markets are looking for a continued easing in UK labor figures for the quarter ended in August. Median market forecasts expect a headline print of Average Earnings Excluding Bonus to tick back to 4.9% for the annualized quarter ended in August, down from the previous 5.1%. The UK’s Claimant Count Change is expected to ease down to 20.2K in September from August’s 23.7K, while the UK’s ILO Unemployment Rate is expected to hold steady at 4.1% for the three month period ended in August.

It’s a GBP-forward data docket in the first half of the trading week; UK CPI inflation figures will followup on Wednesday, with headline YoY CPI inflation expected to ease down to 1.9% from the previous 2.2%, though core CPI UK inflation is expected to continue riding much higher, but still soften to 3.4% from 3.6%.

Meaningful US data isn’t due until Thursday’s US Retail Sales, expected to accelerate to 0.3% MoM in September after August’s lackluster 0.1%. However, Cable traders will be largely focused on Thursday’s Bank of England (BoE) Monetary Policy Report Hearings. UK Retail Sales figures will wrap up the trading week on Friday, where investors are expecting figures to backslide to -0.3% MoM in September from the previous 1.0%.

GBP/USD price forecast

Cable shows a recent shift in momentum on daily candlesticks after the pair moved below its 50-day Exponential Moving Average (EMA) at 1.31050 and is currently roiling near 1.3050. GBP/USD has seen a significant pullback after peaking in late September, and the 50-day EMA is starting to flatten, suggesting a potential weakening of the bullish trend. The pair remains above the 200-day EMA at 1.28450, providing a crucial longer-term support level.

From a momentum perspective, the Moving Average Convergence-Divergence (MACD) is signaling bearish pressure. The MACD line (blue) has crossed below the signal line (orange), with the histogram showing deepening negative bars. This suggests that the selling momentum is picking up, and the pair may face further downside risks if the current trend continues. The MACD histogram’s movement below zero indicates a bearish divergence, confirming the downtrend's strength.

Key support levels to watch include the psychological 1.3000 level and the 200-day EMA around 1.28450, which could act as critical buffers. On the upside, the 50-day EMA near 1.31050 serves as a resistance zone. A break above this level would be necessary to regain bullish momentum. However, as long as the pair stays below the 50-day EMA, the outlook remains cautious, with the potential for further downside in the short term.

GBP/USD daily chart

• GBP/USD remains in a tight range between 1.3010 and 1.3095, pressured by the 50-DMA at 1.3104 and support at 1.3000.
• Momentum favors sellers, with the RSI in bearish territory, suggesting potential for a lower move toward the 100-DMA at 1.2945.
• A break above 1.3100 could lead to resistance at the October 4 peak of 1.3175, with further gains targeting 1.3200.

The Pound Sterling begins the week on the back foot amid a scarce economic docket on Monday, which will gather traction on Tuesday with the UK’s employment report. At the time of writing, the GBP/USD trades at 1.3046 and loses 0.09% amid thin trading conditions.

GBP/USD Price Forecast: Technical outlook

The GBP/USD consolidates for the third straight day within the 1.3010-1.3095 area, unable to crack the top/bottom of the range, capped on the upside by the 50-day moving average (DMA) at 1.3104, and on the downside by the 1.3000 figure.

Momentum shows sellers are in charge, with the Relative Strength Index (RSI) aiming lower and in bearish territory. This suggests the path of least resistance is downward biased, so GBP/USD traders should be wary of the release of crucial UK data.

If GBP/USD drops below 1.3000, the next support would be the 100-DMA at 1.2945, ahead of the 1.2900 figure. Further losses are seen if the major drops below the 200-DMA at 1.2789.

Conversely, if GBP/USD clears the 1.3100 figure, look for the 50-DMA At 1.3104. A breach of the latter will expose the October 4 peak at 1.3175 before challenging 1.3200,

GBP/USD Price Action – Daily Chart

The Pound Sterling (GBP) is likely to decline; the major support at 1.3000 is probably out of reach. In the longer run, there has been no further increase in momentum; a breach of 1.3125 would suggest that 1.3000 is out of reach, UOB Group’s FC analysts Quek Ser Leang and Lee Sue Ann note.

A breach of 1.3125 might suggest 1.3000 out of reach

24-HOUR VIEW: “Last Friday, we expected GBP to trade in a range between 1.3020 and 1.3100. However, GBP traded in a tight range of 40 pips (1.3042/1.3082), its smallest one-day range since early Sep. Despite the quiet price action, downward momentum seems to be building. Today, provided that GBP remain below 1.3090 with minor resistance at 1.3070, it is likely to decline. However, the major support at 1.3000 is probably out of reach (there is another support level at 1.3025).”

1-3 WEEKS VIEW: “We have held a negative GBP view for more than a week (see annotations in the chart below). After GBP fell to 1.3011 and rebounded, we highlighted last Friday (11 Oct, spot at 1.3060) that ‘despite the decline, there has been no further increase in downward momentum’. We added, only a breach of 1.3125 (‘strong resistance’ level) would suggest that 1.3000 is out of reach this time around. We continue to hold the same view.”

• GBP/USD struggles to gain any meaningful traction and remains confined in a range. 
• A modest USD strength caps the pair amid bets for more aggressive BoE policy easing.
• The technical setup favors bearish traders and supports prospects for further losses.

The GBP/USD pair extends its sideways consolidative price move at the start of a new week and oscillates in a narrow trading band around mid-1.3000s through the first half of the European session. Meanwhile, spot prices remain close to a one-month low and seem vulnerable to prolonging the recent retracement slide from the 1.3535 area, or the highest level since March 2022 touched last month. 

The British Pound (GBP) continues with its relative underperformance amid speculations that the Bank of England (BoE) might be heading towards speeding up its rate-cutting cycle. In contrast, the markets have fully priced out the possibility of another oversized interest rate cut by the Federal Reserve (Fed), which assists the US Dollar (USD) to stand tall near a two-month peak and acts as a headwind for the GBP/USD pair. 

From a technical perspective, last week's close below the 50-day Simple Moving Average (SMA) – for the first time since August 12 – was seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart are holding deep in negative territory and are still away from being in the oversold zone. This validates the near-term negative outlook and suggests that the path of least resistance for the GBP/USD pair is to the downside. 

Some follow-through selling below the 1.3000 psychological mark, or the September monthly swing low, will reaffirm the bearish bias and expose the 100-day SMA, currently pegged near the 1.2945 region. A convincing break below the latter has the potential to drag the GBP/USD pair further towards the 1.2900 round-figure mark en route to the next relevant support near the 1.2860 horizontal zone and the 1.2825-1.2820 support zone.

On the flip side, the 50-day SMA support breakpoint, around the 1.3100 mark, now seems to cap any attempted recovery move, above which a fresh bout of a short-covering should pave the way for additional gains. The GBP/USD pair might then surpass an intermediate hurdle near the 1.3155-1.3160 region before aiming to reclaim the 1.3200 round figure and climb to the 1.3265-1.3270 resistance zone.

GBP/USD daily chart

• GBP/USD weakens to near 1.3060 in Monday’s early European session. 
• The US PPI inflation slowed further in September. 
• The dovish stance of the BoE continues to weigh on the GBP. 

The GBP/USD pair trades with mild losses around 1.3060 during the early European session on Monday. The safe-haven flows amid rising geopolitical risks underpin the Greenback and drag the major pair lower. Investors will closely monitor the UK employment data, which is due on Tuesday. 

Data released by the US Bureau of Labor Statistics on Friday showed that the annual Producer Price Index (PPI) rose 1.8% YoY in September, compared to a 1.9% increase seen in August, and came in above the market expectation of 1.6%. Meanwhile, the core PPI climbed 2.8% YoY in the same period, surpassing analysts' forecast of 2.7%. On a monthly basis, the US PPI was unchanged in September, while the core PPI was up 0.2% in the same reported period.

Fed officials have now shifted from trying to combat inflation to trying to keep the job market healthy, the other half of their so-called dual mandate. However, a stronger-than-expected jobs report in September and lower bets of another 50 basis points (bps) interest-rate cuts by the Federal Reserve (Fed) in November could lift the USD against the Pound Sterling (GBP). 

On the GBP’s front, the dovish remarks from the Bank of England (BoE) Governor Andrew Bailey, saying that the UK central bank might become a bit more aggressive in cutting rates, weigh on the Cable. The markets have priced in a 90% chance that the BoE will cut rates in November. The BoE’s Monetary Policy Committee (MPC) will meet on November 7 to announce their decision on the interest rate. Ahead of the key UK event, the UK employment data on Tuesday will be closely watched and might offer some hints about the labour market condition, and UK interest rate outlook.

• GBP/USD kicks off the new week on a weaker note amid sustained USD buying.
• Expectations for more aggressive BoE policy easing further undermine the GBP.
• The fundamental backdrop supports prospects for an extension of the downfall.

The GBP/USD pair struggles to capitalize on Friday's modest gains and attracts fresh sellers at the start of a new week. Spot prices currently trade around mid-1.3000s and remain close to a one-month low touched last Thursday amid a bullish US Dollar (USD). 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, stands tall near its highest level since mid-August as traders have priced out the possibility of further jumbo interest-rate cuts by the Federal Reserve (Fed) in November. This, along with persistent geopolitical risks stemming from the ongoing conflicts in the Middle East, turns out to be another factor benefiting the safe-haven buck and exerting some downward pressure on the GBP/USD pair. 

The British Pound (GBP), on the other hand, is undermined by expectations that the Bank of England (BoE) might be heading towards speeding up its rate-cutting cycle. In fact, markets are pricing in a 90% chance that the BoE will cut rates in November. The bets were lifted by the recent comments from the BoE Governor Andrew Bailey, saying that there was a chance that the central bank could become a bit more aggressive in cutting rates if there's further good news on inflation. 

Meanwhile, the initial market reaction to Friday's economic releases from the UK and the US fades rather quickly, suggesting that the path of least resistance for the GBP/USD pair is to the downside. The UK Office for National Statistics (ONS) reported that the economy grew by 0.2% in August, marking a modest recovery after two months of stagnation in June and July. This was accompanied by better-than-expected UK Manufacturing and Industrial Production figures for August.

From the US, the Producer Price Index for final demand was unchanged in September and rose 1.8% from a year ago. The core gauge that excludes volatile food and energy categories climbed 0.2% from the prior month and 2.8% from a year ago. The data pointed to a favourable inflation outlook and supported expectations for additional interest rate cuts by the Fed in November. This might hold back the USD bulls from placing aggressive bets and offer some support to the GBP/USD pair.

• GBP/USD edges up after bottoming out at 1.3010, with a ‘hammer’ pattern signaling potential for further upside.
• Clearing the October 10 high of 1.3093 and the 50-DMA at 1.3099 would open the door for buyers, with resistance at 1.3113 and 1.3134.
• A failure to break 1.3100 could see sellers push the pair back toward the week’s low of 1.3010.

The Pound Sterling recovers some ground against the greenback as a ‘hammer’ emerges on the daily chart and rises above 1.3050, registering gains of over 0.15%. Goodish economic data in the UK sponsored the GBP/USD’s recovery as the economy grew around estimates. Nevertheless, a slightly hot Producer Price Index (PPI) report in the US capped the GBP’s gains.

GBP/USD Price Forecast: Technical outlook

The GBP/USD seems to have bottomed out after retreating from yearly highs of 1.3434 to a daily low of 1.3010 on October 10. A ‘hammer’ formation preceded by a downtrend hints that a reversal is possible.

Nevertheless, the pair should clear the October 10 high of 1.3093, immediately followed by the 50-day moving average (DMA) at 1.3099, so buyers could remain hopeful of higher exchange rates.

In that outcome, the GBP/USD next resistance would be the 1.3100 figure, followed by the October 8 high at 1.3113. On further strength, the next supply zone will be the October 7 weekly high of 1.3134.

Conversely, if GBP/USD fails to clear 1.3100, sellers could step in and push prices below the psychological 1.3050 level, driving the exchange rate toward the week's lows at 1.3010.

From a momentum standpoint, the GBP/USD is barely biased, but the Relative Strength Index (RSI) has increased upwards during the last couple of days, opening the door for a leg-up.

GBP/USD Price Action – Daily Chart

Pound Sterling gains after upbeat UK data, hot US PPI

The Pound Sterling (GBP) gyrates in a tight range near 1.3060 against the US Dollar (USD) in Friday's North American session. The GBP/USD pair remains sideways despite the release of the hotter-than-expected United States (US) annual US Producer Price Index (PPI) data for September. Read More...

UK GDP rises 0.2% MoM in August, as expected

The UK economy expanded by 0.2% over the month in August, having stagnated for the second consecutive month in July, the latest data published by the Office for National Statistics (ONS) showed on Friday. The reading matched the market consensus of 0.2% growth in the reported period. Read More...

GBP/USD consolidates around mid-1.3000s, seems vulnerable ahead of UK data

The GBP/USD pair struggles to capitalize on the previous day's modest bounce from the 1.3020 area or a one-month low and oscillates in a narrow band during the Asian session on Friday. Spot prices currently hover around mid-1.3000s, unchanged for the day, and seem vulnerable to prolonging the recent retracement slide from the highest level since March 2022 touched last month. Read More...

The Pound Sterling (GBP) is expected to trade in a range, probably between 1.3020 and 1.3100. In the longer run, there has been no further increase in momentum; a breach of 1.3125 would suggest that 1.3000 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Breach of 1.3125 to suggest that 1.3000 is out of reach

24-HOUR VIEW: “Yesterday, when GBP was at 1.3070, we expected it to ‘drift lower, potentially breaking below 1.3050.’ We added, ‘due to the lackluster momentum, any decline is unlikely to reach 1.3000.’ GBP did not break below 1.3050 until NY trade, when it dropped to 1.3011 and then rebounded sharply. GBP closed slightly lower at 1.3061 (-0.11%). The price action did not result in any increase in downward momentum. Today, we expect GBP to trade in a range, probably between 1.3020 and 1.3100.”

1-3 WEEKS VIEW: “In our most recent narrative from last Monday (04 Oct, spot at 1.3130), we indicated that “although the recent price action suggests further GBP weakness, conditions are oversold, and the next major support at 1.3000 may not come into view so soon.” Yesterday, GBP dropped to a low of 1.3011. Despite the decline, there has been no further increase in downward momentum. However, only a breach of 1.3125 (‘strong resistance’ level was at 1.3150 yesterday) would suggest that 1.3000 is out of reach this time around.”