- The GBP/USD forecast shows the pound steady amid improved sentiment and a less dovish Fed.
- Chair Powell reduced interest rates by 25 bps on Wednesday but provided no clarity on another cut in December.
- Traders look forward to FOMC members Bowman and Logan’s speeches for further Fed policy direction.
The GBP/USD forecast reflects a downward momentum, as it trades around 1.3180, following a slight recovery towards the 1.3200 level earlier in the session. The pound sterling faced pressure as the dollar strengthened amid the progressing trade talks. On Thursday, President Trump and Xi decided to cooperate and support the dollar.
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Meanwhile, the ongoing policy divergence between the Bank of England and the US Federal Reserve favors the greenback’s growth. These developments increased the risk appetite, supporting the GBP/USD pair. Soon after, however, they weighed on it as the markets shifted their attention back to monetary policy cues.
On the UK side, the subdued growth and productivity outlook support speculation of a December rate cut by the BoE. This dovish outlook weakened the pound as traders anticipated commentary from the BoE members later this week.
On the US side, the Fed reduced the rates by 25 bps on Wednesday. However, the Fed policy remains vague about a December rate cut, fueling caution in the market. The Fed rate cut and current optimism in the US economy helped the greenback recover.
GBP/USD Daily Key Events
The major events in the day include
- FOMC Member Bowman speaks
- FOMC Member Logan speaks
On Thursday, traders await the FOMC members Bowman and Logan’s speeches for further inflation direction and the Fed’s policy cues.
GBP/USD Technical Forecast: Bearish Bias Below Key MAs
The GBP/USD 4-hour chart shows sustained bearish momentum, as the pair trades around 1.3180 after failed recovery attempts above the key MAs. The price remains below the key 50-, 100-, and 200-period MAs, suggesting sellers’ dominance.
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The RSI is near 30.0, approaching the oversold territory, reflecting limited potential for trend reversal. A decisive break above 1.3250 could open room for 1.3300. Conversely, a drop below 1.3170 could trigger further downside towards the 1.3100 and 1.3100 zone.
Support Levels
Resistance Levels
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