FX.co ★ GBP/USD

The British Pound slipped slightly against the US Dollar, with GBP/USD trading around 1.3380 after a minor uptick in the prior session. The pair is being capped by a resilient greenback, which continues to draw support from the Federal Reserve’s hawkish policy outlook. Last week, the Fed delivered a 25-basis-point rate hike, its first in three years, and hinted at further tightening in the coming months. Fed Chair Kevin Warsh said inflation is “really high” and has lasted “far too long,” adding that summer data did not show any real improvement. CME FedWatch now shows a near 56.5% probability of another hike at the October meeting, up from roughly 42.5% a week earlier, keeping the US Dollar firm. On the UK side, the political backdrop remains supportive, with city representatives and media expressing long-standing confidence in the government’s commitment to governance, according to a strategist at a Canadian bank. This trust in local institutions continues to underpin market sentiment even as traders digest recent and upcoming Bank of England figures. The BoE’s FXStreet SpeechTracker score of 7.2, above its historical average of 6.6, signals a more hawkish tilt than usual. Policymakers warned that CPI could exceed 4% in early 2027, compared with a previous peak of 3.2%. Three members opposed the majority by voting to raise rates immediately to 4%, while the committee held the rate at 3.75%. The BoE also noted that policy may need to tighten if Middle East tensions persist. Still, with Q3 GDP growth at 0.4% and a quantitative tightening pace of £460 million per year, the UK is pursuing a gradual, consolidation-oriented path. The decision to halt APF Gold Notes trading until April 2027 and hold long-term notes to maturity reinforces that careful approach. For GBP/USD, the fundamental tug-of-war between Fed hawkishness and BoE caution remains the key driver, and the yield differential continues to favor the US Dollar near term.

GBP/USD is trading at 1.3380, holding just above the H1 50 SMA at 1.3370, which acts as immediate dynamic support. On the H4 chart, the 200 SMA is at 1.3525, and the 50 SMA is at 1.3470. Both sit above price, confirming a medium-term bearish bias. On the H1 chart, the 200 SMA is at 1.3470, while the 50 SMA is at 1.3370. That puts price above the short-term moving average but below the longer ones, a mixed signal that favors sellers unless buyers reclaim 1.3470. Separately from the SMAs, horizontal support and resistance give clearer trade levels. Immediate resistance is 1.3400; a sustained close above it could open 1.3420, then 1.3450, 1.3470, 1.3500 and 1.3525. Additional resistance sits at 1.3430, 1.3460, 1.3480, 1.3510, 1.3535 and 1.3560, with trend resistance from the recent descending channel near 1.3420–1.3450. First support is 1.3370, followed by 1.3350 and 1.3320. Extra supports include 1.3360, 1.3340, 1.3310, 1.3290, 1.3270, and 1.3250. Trend-based support from the recent higher-low structure is around 1.3350–1.3320, making the 1.3370–1.3320 zone a key demand area. The H1 200 SMA and H4 50 SMA at 1.3470 form a major confluence resistance band; a break above it would expose the H4 200 SMA at 1.3525. Conversely, a daily close below 1.3370 would weaken the short-term setup and open 1.3320, then 1.3300 and 1.3280. If buyers defend 1.3370–1.3350, a rebound toward 1.3400 and 1.3420 is possible. A clean breakout above 1.3470 would shift the bias bullish and target 1.3500 and 1.3525, while rejection there could trigger a pullback toward 1.3350 and 1.3320. Overall, the technical bias remains bearish below 1.3470, but the 1.3370 support is critical for near-term direction.