GBP/USD Forecast and News
GBP/USD makes a U-turn; focus is now on 1.3400
GBP/USD rebounds from earlier lows and trades at shouting distance from the key 1.3400 barrier ahead of the closing bell on Wall Street on Friday. Cable’s resurgence comes in tandem with some loss of traction in the Greenback and a generalised improvement in the broader risk complex.
Latest Pound Sterling News
GBP/USD Technical Overview
In the daily chart, GBP/USD holds a bearish near-term bias as spot remains below a dense band of volatility and trend indicators. Price is under the 20-day Bollinger simple moving average and capped by the lower band, while the 100-day moving average at 1.3438 adds medium-term overhead pressure. The Relative Strength Index (14) at 31.3 flirts with oversold territory, hinting that downside momentum is stretched but not yet accompanied by a meaningful reclaim of resistance levels.
On the topside, immediate resistance emerges at the Bollinger lower band around 1.3365, followed by the 100-day moving average at 1.3438, which reinforces the broader bearish structure. Further up, the Bollinger middle band at 1.3515 and the upper band near 1.3670 define subsequent hurdles that bulls would need to overcome to neutralize the current downtrend. With no clear support levels from the presented indicators below spot, the pair remains vulnerable to additional selling while it trades beneath this stacked resistance zone.
Fundamental Overview
The BoE’s Monetary Policy Committee (MPC) voted 6-3 to hold the Bank Rate at 3.75% on Thursday, despite inflation rising well above its 2% target. However, policymakers warned a hike was becoming increasingly likely. The three dissenters voted to enact a hike of 25 basis points (bps) to 4.0%.
A hike of at least 25 bps is widely anticipated at its next meeting in November, according to LSEG data.
On the other hand, the U.S. Federal Reserve (Fed) announced a quarter-point hike on Wednesday, its first hike since 2023. Fed Chair Kevin Warsh said on Wednesday that “the plain fact is that inflation is too high and has been for too long.” “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved,” he added.
Traders are now pricing in nearly a 53.1% probability of another US rate hike when the Fed meets next in October, compared with nearly 44% a day ago, according to the CME FedWatch tool.
Pound extends modest recovery as BoE hawkish hold and UK fiscal signals support GBP
Strategists at Scotiabank highlight that the Pound is “seeing marginal strength vs. the USD and extending its modest recovery in the aftermath of the BoE’s hawkish hold.” They add that “yield spreads appear to be offering renewed support to the GBP following their recent pullback, as markets signal additional confidence in the UK’s fiscal outlook in response to the PM Burnham’s budget comments.”
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
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Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
Founded in 1694, the Bank of England (BoE) is the central bank of the United Kingdom (UK). Known as ‘The old lady of Threadneedle Street’, the bank’s mission is "to promote the good of the people of the United Kingdom by maintaining monetary and financial stability".
The Bank of England is responsible for maintaining the UK’s economic stability. It operates monetary policy by adjusting the Bank Rate and, in certain circumstances, supplements this with measures such as quantitative easing.
The Bank of England decides monetary policy for the United Kingdom. Its primary goal is to achieve a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
The official website, on X and YouTube
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website, on X and Facebook
Andrew Bailey
Andrew Bailey has been the Governor of the BoE since March 2020 and his appointment ends on March 2028. Previously, he served in the BoJ as its Chief Cashier, Deputy Governor for Prudential Regulation and Chief Executive of the Financial Conduct Authority.
Kevin Warsh
Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term ending in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who already served as a member of the Fed Board of Governors from 2006 to 2011 and was significantly involved in the central bank's response to the financial crisis. Before that, he served as a special assistant to the president for economic policy and the executive secretary of the National Economic Council under President George W. Bush.
BOE NEWS & ANALYSIS
FED NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States.
As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
Related pairs
EUR/USD
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).