FX.co ★ GBP/USD

GBP/USD is rising steadily, posting small gains and hovering around 1.3229 during the European session on Thursday. However, upside momentum for this currency pair may be constrained by the widening policy gap between the Fed, which is becoming increasingly hawkish, and the Bank of England, which is staying rather neutral. In terms of economic releases, the US S&P Global Flash PMI published on Wednesday indicated that the growth momentum is gaining strength. The Composite PMI increased to 58.4 in September from 56.0 in the previous month, indicating an increase in activity. In addition, the Manufacturing PMI rose even faster to 57.0 in September from 53.9 the previous month, better than expected at 53.5. Fed Governor Michael Barr noted on Wednesday that “more changes may be needed to curb inflation.” In addition, Fed Chairman Tom Barkin and Boston Fed President Susan Collins supported the recent interest rate hike earlier this week, citing ongoing inflationary pressures. Positive US PMI numbers and hawkish comments from Fed members could help the Greenback and pose a short-term headwind for the major currency pair. On the UK side, Bank of America Global Research expects the BoE to hike rates twice over the next six months, as elevated energy costs increase the risk of prolonged inflationary pressures. The OECD, meanwhile, noted on Wednesday that the UK central bank does not need to hike interest rates, as monetary policy is already tight enough to curb inflation. LSEG figures show a 67% likelihood of a BoE rate increase in November, followed by another in December. Strategic analysts at Brown Brothers Harriman have pointed out the risk of such aggressive pricing in the market, stating that “the swaps curve still implies roughly 100 bps of BoE rate hikes in the next twelve months to 4.75%.” According to them, “the BoE may not need to tighten as much as the markets expect” due to “the UK economy currently running below its capacity,” “the Bank Rate of 3.75% is close to the upper end of the BoE’s 2% to 4% neutral range,” and “the fiscal policy stance will be tightening.” In the intraday chart, GBP/USD remains bearish, with the spot rate trading below all major benchmarks. Technically, GBP/USD is currently below even the lower Bollinger band in the latest 20-period reading, while the middle Bollinger band and the 100-day SMA support bearishness, with the currency trading well below these key benchmarks. The RSI value of 25.44 is oversold, which means that although selling pressure is strong, the pace of the move may slow soon. On the upside, the nearest resistance is the lower Bollinger Band around 1.3258, the first challenge for any corrective move. Above this level, the second cluster of resistance comes at the 100-day SMA level of 1.3428 and the Bollinger middle band around 1.3455, while the upper Bollinger band limit around 1.3652 will serve as a stronger barrier. On the downside, the first support level is the June 24 low of 1.3140, with the second at the November 20, 2025 low of 1.3038. Further selling below this level may put the 1.3000 psychological level under pressure.