The GBP/USD pair eased slightly on Friday, but that decline came only at the end of the day — after the pair continued its intraday ascent. Comparing moves in the euro and the pound right now is pointless because they have virtually no correlation. Sterling has advanced strongly in recent weeks in a way fully consistent with the technical picture on higher timeframes. At the same time, the euro has simply fallen regardless of fundamentals, macro data, or geopolitics. In other words, when analyzing and forecasting sterling moves, you can legitimately pay attention to events and releases; trying to do the same for the euro is largely futile right now.
Sterling continues to please traders because its moves have been mechanically logical, starting from the higher timeframes. Remember: daily and weekly charts show valid sideways channels. The price tested the lower boundaries of those channels in mid-October and then rallied sharply. From that point, GBP/USD was bound to move toward the channels' upper edges, roughly around 1.3650 and 1.3780. Those targets and channel lines are plainly visible on the relevant charts.
From our point of view, sterling should continue higher in any case, because a flat is often random and, having worked the lows, the pair now has a technical case to aim for the tops. This week the Bank of England may give sterling further support — the BoE is likely to raise rates for the first time in this tightening cycle. Inflation in the U.K. is rising just as in the EU and the U.S., so it would be odd to expect the BoE not to tighten. If it does, why should only the dollar rally?
The market has already priced much of Fed tightening; now it's time to price BoE tightening. We also expect the same external events to provoke very different responses in the pound and the euro. For example, a renewed geopolitical flare-up in the Middle East could push the euro down again, while sterling may remain relatively resilient. If U.S. employment data come in weak on Friday, that is unlikely to help the euro much — but a weaker dollar could be very positive for the pound.
That said, don't assume sterling will rise without interruption. Anything can happen in markets. For example, Friday ended with liquidity being withdrawn from the recent 4-hour high and an order-block formation. Technically, a pullback at the start of the new week would be natural. However, we do not expect a deep decline because the stronger signals on higher timeframes still point north. Our forecast is therefore a modest correction followed by a resumption of the local uptrend.
The average volatility of the GBP/USD pair over the last 5 trading days is 64 pips. For the pound/dollar pair, this value is characterized as "average." On Monday, November 2, we therefore expect movement inside a range bounded by 1.3325 and 1.3453. The higher linear-regression channel has turned down again. The CCI entered the oversold area twice and formed a bullish divergence, signaling a potential end to the downtrend.
Nearest support levels:
S1 – 1.3367
S2 – 1.3306
S3 – 1.3245
Nearest resistance levels:
R1 – 1.3428
R2 – 1.3489
R3 – 1.3550
Trading recommendations:
The GBP/USD pair has begun an uptrend that could become the start of a longer-term move. Donald Trump's policies will continue to exert pressure on the U.S. economy, so we do not expect long-term dollar strength. So far in 2026, geopolitics and inflation have supported the dollar, driving capital into safety and prompting the Fed to return to tightening. However, on the weekly timeframe, a flat range between 1.3150 and 1.3780 within a four-year uptrend supports expectations for sterling's medium-term rise. Consider long positions with targets of 1.3428 and 1.3453 while price stays above the moving average. When price trades below the moving average, you can trade the downside, with targets of 1.3306 and 1.3245.
Notes on the charts:
- Linear-regression channels help identify the current trend. If both channels point the same way, the trend is strong.
- The moving average (settings 20,0, smoothed) defines the short-term tendency and the direction in which you should trade now.
- Murray levels are target levels for moves and corrections.
- Volatility levels (red lines) indicate the likely price channel the pair will inhabit over the next day based on current volatility.
- CCI indicator — entries into the oversold area (below -250) or overbought area (above +250) suggest a trend reversal may be imminent.
