Key Moments
- GBP/USD has broken above the 1.3275-1.3280 technical confluence, opening the door for further upside toward 1.3400 and beyond.
- Futures markets are assigning nearly a 90% chance of a 25 bps rate cut by the Federal Reserve, which would take the policy range to 3.50%-3.75%.
- Market pricing suggests around an 88% probability of a quarter-point reduction at the Bank of England’s upcoming December meeting.
Key Moments
UK Data in Focus
The United Kingdom’s economic calendar features the release of monthly Gross Domestic Product for October and Industrial Production figures. Both data points are scheduled for publication by the Office for National Statistics this Thursday at 07:00 GMT, and are likely to draw close attention from GBP traders.
GBP/USD Technical Landscape
GBP/USD has extended its advance after breaking through the 1.3275-1.3280 area, a zone that combined the 200-day Simple Moving Average and the 38.2% Fibonacci retracement of the September-November decline. This technical breach is being interpreted as an important bullish signal for the pair.
Momentum indicators on the daily chart remain in positive territory, supporting the case for additional gains. If buyers can push prices beyond the 1.3365 region, which aligns with the 50% retracement level, the pair would be positioned to challenge the 1.3400 handle. Sustained strength above there could open a path toward the 61.8% retracement band near the 1.3455-1.3460 horizontal zone, with scope for a further move toward the psychologically significant 1.3500 level.
On the downside, any corrective pullback is expected to encounter initial support near the 1.3300 round number, followed by the 1.3380-1.3375 breakout area now turned support. A deeper retreat is likely to be viewed as a dip-buying opportunity, with losses seen as limited around the 1.3225 region. Below that, the next support sits at 1.3200; a clear break under this level would undermine the constructive setup and shift the short-term bias toward sellers. In that case, GBP/USD could accelerate lower toward the 1.3145-1.3140 intermediate support zone before potentially moving to levels below 1.3100.
| GBP/USD Technical Levels | Role |
|---|---|
| 1.3500 | Psychological resistance |
| 1.3455-1.3460 | 61.8% Fibonacci / horizontal barrier |
| 1.3400 | Round-number resistance |
| 1.3365 | 50% Fibonacci level |
| 1.3275-1.3280 | 200-day SMA / 38.2% Fibonacci confluence (broken higher) |
| 1.3300 | Initial support on pullbacks |
| 1.3380-1.3375 | Former resistance, now support zone |
| 1.3225 | Key support on dips |
| 1.3200 | Critical support; break would favor bears |
| 1.3145-1.3140 | Intermediate support |
| Sub-1.3100 | Lower target if bearish bias takes hold |
Fed Outlook and Dollar Dynamics
In rates markets, participants have nearly fully discounted a 25 basis point cut in the Federal Reserve’s benchmark overnight rate at the end of its two-day meeting on Wednesday. Such a move would represent the third reduction this year and would lower the target band to 3.50%-3.75%.
Despite the anticipated easing, investors expect a “hawkish cut” characterized by cautious communication about the future path of policy. The Fed is seen as potentially signaling a pause in early 2026 in response to persistent inflation risks and an employment backdrop that remains firm. This stance could lend some support to the US Dollar and act as a counterforce to further gains in GBP/USD.
UK Policy Expectations and Sterling Drivers
For the British currency, sentiment is being shaped by concerns over higher overall tax burdens following the UK autumn budget, as well as evidence of softer inflation and a cooling labor market. These developments bolster expectations that the Bank of England may adjust its policy stance further.
According to current market pricing, there is a high probability around 88% of a 25 basis point cut at the upcoming Bank of England December meeting, following indications in recent economic data that inflation pressures have moderated, as referenced by the CME FedWatch tool.
Weekly GBP/USD Perspective
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:
GBP/USD: Pound Sterling retains bullish bias ahead of Fed verdict
The Pound Sterling (GBP) recovery gathered steam against the US Dollar (USD), driving GBP/USD to fresh five-week highs above the 1.3350 level.
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