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GBP/USD Price Forecast: Picks up above 1.3500 amid generalised US Dollar weakness

  • British Pound picks up above 1.3500 against the US Dollar, after bouncing off lows at 1.3474 .
  • The US Dollar struggles on Friday as a run of soft inflation data has pushed back hopes of immediate Fed rate hikes.
  • Later today, the US Retail Sales and Michigan Consumer Sentiment Index data will provide further insight about the US economic outlook

The British Pound (GBP) pares losses against a weaker US Dollar (USD) on Friday, as a run of soft US inflation figures and growing signs of labour market deterioration have cast doubt about the odds for an immediate Federal Reserve (Fed) rate hike. The GBP/USD has returned to the 1.3520 area from Thursday’s lows at 1.3474, inching towards a key resistance around 1.3550.

The focus on Friday is on the US Retail Sales, which are expected to show a 0.1% uptick in July, after a 0.2% gain in June, alongside the University of Michigan survey, which is foreseen to be little changed in August.

FX Strategists at ING state that these are “second-tier releases” that would “likely need to deliver significant surprises to trigger a meaningful dollar reaction,” reinforcing the sense that, absent a major data shock, the Dollar is unlikely to break decisively from its current, relatively stable trading pattern.

Technical Analysis: Key resistance is at the 1.3550 area

GBP/USD Chart Analysis

GBP/USD trades at 1.3520 at the time of writing, trapped within the weekly trading range, with key resistance area around 1.3550. Momentum indicators show an incipient bullish traction with the 4-hour Relative Strength Index (14) above 60, yet with the Moving Average Convergence Divergence (MACD) indicator flat near the zero line, which suggests that the move is far from impulsive.

Pound bulls would need to confirm above the July 15 and August 12 highs, around 1.3550, to resume their broader bullish trend, aiming for a retest of the early May highs in the mid-range of the 1.3600s.

Downside attempts, on the other hand, have been contained at Thursday’s low of 1.3474, ahead of the previous week’s trading bottom, just above 1.3400. Further down, there is no clear support until the July 27 low, at 1.3273.

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GBP strengthens to near 1.3500 as Fed rate hike bets ease

  • GBP/USD gains traction to around 1.3495 in Friday’s early European session.
  • US PPI inflation was flat in July, below expectations.
  • BoE’s Pill said UK growth supports case for higher interest rates.

The GBP/USD pair gathers strength to near 1.3495 during the early European trading hours on Friday. The British Pound (GBP) edges higher against the US Dollar (USD) as cooler-than-expected US consumer and producer price data have limited the Federal Reserve’s (Fed) room for further interest rate hikes. Traders will keep an eye on the US July Retail Sales report later on Friday. 

Wholesale costs for goods and services in the United States (US) were flat in July, below the market consensus of 0.2% and after falling 0.1% in June, the Bureau of Labor Statistics reported on Thursday. 

Additionally, the core Producer Price Index (PPI), which excludes food and energy, increased 0.2% MoM in July, compared to a rise of 0.4% in June, softer than the forecast for a 0.3% gain. On an annual basis, the headline PPI climbed 4.7% YoY in July, while the core PPI rose 4.2% YoY during the same period. 

Traders further reduced the odds of a September rate hike from the Fed following signs of softening US inflation pressures. Markets are now pricing a 34.8% probability ‌of a US rate hike at the September meeting, down from 40% immediately after the PPI data, according to the CME FedWatch Tool.  

However, geopolitical tensions in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair. A senior Islamic Revolutionary Guards Corps (IRGC) official, Hossein Taeb, said on Thursday that the Strait of Hormuz is “under Iran’s control and management” after US President Trump said Washington has “total control” over the waterway, per Fox News. 

The UK economy grew by 0.4% QoQ in the second quarter (Q2) of 2026, versus a 0.6% growth in Q1, the Office for National Statistics reported on Thursday. This figure came in line with market expectations. Bank of England (BoE) Chief Economist Huw Pill stated ‌that stronger-than-expected UK economic growth readings reinforced the case for higher borrowing costs to bring inflation back to target.

UK growth outlook clouded by geopolitical risks but activity remains resilient

Societe Generale cautions that “the key risk remains the trajectory of the US-Iran conflict,” highlighting the potential for geopolitical tensions to weigh on the UK outlook. Even so, the bank notes that “so far, UK activity data has proved resilient to the crisis,” with recent indicators suggesting that domestic momentum has, for now, withstood the external shock.

Chart Analysis GBP/USD

Technical Analysis: GBP/USD maintains a constructive outlook in the near term

In the daily chart, GBP/USD holds above the Bollinger Bands simple moving average (SMA) middle line and the 100-day moving average, which together reinforce a constructive, near-term bullish bias while price approaches the upper Bollinger band resistance. The Relative Strength Index (14) around 59 leans toward positive momentum without yet signaling overbought conditions, suggesting dips may attract buyers while the broader uptrend remains in place.

On the downside, immediate support is seen near the 1.3425 Bollinger SMA middle band, followed by the 100-day moving average at 1.3415, with the lower Bollinger band down at 1.3280 acting as a deeper structural floor if correction extends. On the topside, the upper Bollinger band at 1.3570 is the next notable resistance, where a sustained break would open the door to further gains, while failure to clear this barrier would likely keep GBP/USD consolidating above the current cluster of moving-average support.

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British Pound attracts bids against Japanese Yen after strong UK Q2 GDP data

  • The British Pound gains slightly against the Japanese Yen due to stronger-than-expected UK Q2 GDP data.
  • UK GDP growth remained steady at 0.6% in the second quarter this year.
  • Investors seek fresh cues regarding more US-Japan intervention to support the Yen.

The British Pound (GBP) attracts slight bids against the Japanese Yen (JPY) during the European trading session on Wednesday, following the release of the preliminary United Kingdom (UK) Q2 Gross Domestic Product (GDP) data.

The Office for National Statistics (ONS) has reported that the economy expanded at a steady pace of 0.6%, faster than estimates of 0.4%. On an annualized basis, the GDP growth also remained higher at 1.2% than the 1.1% estimates and the previous reading of 0.9%. In June, GDP growth was 0.3%, while it was expected to remain flat again.

Meanwhile, monthly Manufacturing and Industrial Production data also remained stronger than expectations. Manufacturing Production rose by 0.5%, while it was expected to decline by 0.2%. Industrial Production grew 0.2%, faster than 0.1% estimates.

Going forward, the British currency will be influenced by market expectations for the Bank of England’s (BoE) monetary policy outlook.

On the Tokyo front, the Japanese Yen trades broadly sideways as investors seek fresh cues from Japan’s Ministry of Finance (MoF) on whether there will be more United States (US)-Japan joint intervention to support the currency.

The US-Japan jointly intervened on the last day of July to counter “excessive volatility and disorderly movements in the Japanese yen in recent months”, Japan MoF reported.

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British Pound holds steady above 1.3500 vs USD as traders eye US CPI ahead of UK GDP

  • GBP/USD struggles to gain any meaningful traction ahead of the key US-UK macro releases.
  • The US CPI is due later this Wednesday, followed by the UK GDP and US PPI on Thursday.
  • Geopolitical risks and Fed-hike bets underpin the USD, capping the upside for spot prices.

The GBP/USD pair extends its sideways consolidation around the 1.3500 psychological mark through the first half of the European session on Wednesday. Traders opt to wait on the sidelines ahead of important macro data from the US and the UK.

The crucial US Consumer Price Index (CPI) report is due later today, followed by the preliminary Q2 GDP figures from the UK and the US Producer Price Index (PPI) on Thursday. In the meantime, hawkish US Federal Reserve (Fed) expectations might continue to underpin the US Dollar (USD) and cap GBP/USD.

Strategists at Deutsche Bank highlight how finely poised Fed expectations remain ahead of the latest US inflation releases, noting that “futures this morning are pointing to a 51% chance of a September hike.” They add that the current balance of risks could shift quickly, as “if we do get an upside or downside surprise today, that could help shift the balance one way or the other,” underscoring how sensitive Dollar pricing is to incoming data at this stage of the policy cycle.

According to the CME Group’s FedWatch Tool, traders are currently pricing in over a 75% chance that the US central bank will raise borrowing costs by the year-end amid inflation risks stemming from volatile oil prices. Furthermore, the US-Iran standoff over the Strait of Hormuz lends additional support to the safe-haven buck.

An advisor to Iran’s Supreme Leader Mojtaba Khamenei said on Tuesday that the Strait of Hormuz will not be opened until the US meets Tehran’s demands. Moreover, Iran-backed Houthis in Yemen escalated attacks on vessels in the Red Sea and Bab el-Mandeb Strait, targeting Saudi ships, leading to increased war-risk premiums.

The aforementioned fundamental backdrop favors USD bulls and warrants caution before positioning for an extension of the GBP/USD pair’s recent move up witnessed over the past two weeks or so. However, the recent breakout through the 1.3500 mark suggests that the path of least resistance for spot prices remains to the upside.

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British Pound sits near one-week top, above 215.00 vs weak Yen ahead of UK GDP

  • GBP/JPY attracts some dip-buyers on Tuesday amid the underlying JPY bearish sentiment.
  • Japan’s fiscal concerns and the wide UK-Japan rate gap continue to undermine the JPY.
  • GBP bulls seem hesitant ahead of key UK macro data on Thursday, including the Q2 GDP.

The GBP/JPY cross recovers a modest intraday dip and climbs above the 215.00 psychological mark during the first half of the European session on Tuesday. Spot prices currently trade near an over one-week high, touched on Monday, and seem poised to appreciate further amid a broadly weaker Japanese Yen (JPY).

The brutal market reaction to a joint US-Japan intervention in late July turned out to be short-lived amid growing concerns about Japan’s worsening fiscal conditions, aggravated by Prime Minister Sanae Takaichi’s aggressive economic stimulus and tax cuts. Adding to this, the persistently wide interest rate gap between Japan and other major economies, including the UK, which has been fueling the so-called carry trade, contributes to the JPY’s underperformance and acts as a tailwind for the GBP/JPY cross.

The Bank of Japan (BoJ) lifted the short-term policy rate in June to 1.00%, or the highest since 1995, while the Bank of England’s (BoE) base rate is at 3.75%. This leaves a gap of around 275 basis points (bps). Furthermore, investors remain worried that Japan’s economy will remain under strain amid energy supply disruptions due to the Middle East conflict. Japan depends on the Middle East for roughly 95% of its crude oil, suggesting that the path of least resistance for the GBP/JPY cross remains to the upside.

Meanwhile, the British Pound (GBP)  struggles to attract buyers amid a modest US Dollar (USD) strength. Traders also seem reluctant ahead of the UK data dump, including the Q2 GDP report, on Thursday, which might keep a lid on any further appreciation move for the GBP/JPY cross. Nevertheless, the fundamental backdrop validates the near-term positive outlook. This, in turn, suggests that any corrective pullback could be seen as a buying opportunity and is more likely to remain limited.

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EUR/GBP Price Forecast: Under growing bearish pressure below 0.8550

  • EUR/GBP consolidates near two-week lows below 0.8550.
  • The stalled US-Iran peace plan and higher Oil prices are adding pressure on the Euro
  • Confirmation below the 0.8550 support area would bring 0.8530 and 0.8510 targets into focus.

The Euro (EUR) extends losses for the second consecutive day against the British Pound (GBP) on Tuesday, weighed by a cautious market mood as hopes of a swift end to Iran’s war wane and Oil prices climb. The EUR USD pair remains capped below 0.8550 after hitting two-week lows at 0.8536 on Monday.

In the absence of key macroeconomic releases in the UK or the Eurozone, geopolitical tensions are the main market driver on Tuesday. In that sense, Strategists at Rabobank caution that, although the Eurozone’s economy seems to have weathered the higher energy prices and supply disruptions from the closure of the Strait of Hormuz, the breakdown of the US-Iran peace agreement “clearly implies downside risks to growth and upside inflation concerns,” posing a heavy weight on the Euro.

Technical Analysis: Bears remain in control while below 0.8550

EUR/GBP Chart Analysis

EUR/GBP broke the ascending channel in late July, and confirmed a bearish reversal this week after slipping below a previous support at the 0.8550 area, which is now holding bulls. Momentum indicators endorse the bearish view, with the 4-hour Relative Strength Index (14) hovering in the mid-30s and the Moving Average Convergence Divergence (MACD) at slightly negative levels.

Initial support emerges at 0.8530 (July 24 low) and below here, a previous resistance area, around 0.8510. On the topside, the mentioned 0.8550 area should be broken to bring price action back to the previous ranges and shift the focus back to Monday’s highs, at 0.8566 and the August 5 and 6 highs, near 0.8580.

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GBP clings to gains against US Dollar, US CPI in focus

  • The British Pound trades firmly at around 1.3500 against the US Dollar.
  • Investors await the US CPI data for July and the UK Q2 GDP data.
  • The Fed is not expected to raise interest rates in September anymore.

The British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term.

Pound Sterling Price This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD0.08%-0.18%0.89%-0.14%0.08%0.12%0.29%
EUR-0.08%-0.27%0.79%-0.29%-0.06%-0.06%0.11%
GBP0.18%0.27%1.01%-0.03%0.21%0.23%0.36%
JPY-0.89%-0.79%-1.01%-0.71%-0.47%-0.59%-0.39%
CAD0.14%0.29%0.03%0.71%0.25%0.12%0.47%
AUD-0.08%0.06%-0.21%0.47%-0.25%0.00%0.14%
NZD-0.12%0.06%-0.23%0.59%-0.12%-0.00%0.15%
CHF-0.29%-0.11%-0.36%0.39%-0.47%-0.14%-0.15%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Strategists at Rabobank point out that “for the UK, the market is currently pricing in a reduced expectation of a rate hike by the end of the year,

This week, the major trigger for the British currency will be the preliminary United Kingdom (UK) Q2 and the June month Gross Domestic Product (GDP) data, which will be released on Thursday. In the April-June period, the UK economy is expected to have grown at a moderate pace of 0.4% vs. the previous reading of 0.6%. On a monthly basis, the GDP is seen contracting by 0.1%.

Meanwhile, the US Dollar Index (DXY) trades almost flat at press time, holding onto Monday’s recovery move at around 99.80. The USD Index is expected to remain sideways as investors await the United States (US) Consumer Price Index (CPI) data for July, which will be released on Wednesday.

US inflation seen firming but not reaccelerating in July

Brown Brothers Harriman’s Elias Haddad expects the upcoming US July CPI report to show inflation “firm modestly but stop short of signaling a renewed acceleration in inflation.” He notes that “headline CPI is expected to rise +0.1% m/m vs. -0.4% in June and ease to 3.4% y/y vs. 3.5% in June,” while “core CPI is expected to rise +0.2% m/m vs. 0.0% in June and ease to 2.5% y/y vs. 2.6% in June.” The data are due Wednesday and, in Haddad’s view, should confirm a gradual cooling in underlying price pressures rather than a renewed upswing.

The US inflation data will have a significant impact on the Federal Reserve’s (Fed) interest rate expectations, as the July monetary policy statement showed heightened concerns among policymakers toward upside inflation risks.

Lately, traders have priced out the possibility of a Fed interest rate hike in the September meeting after the release of weak US Nonfarm Payrolls (NFP) data for July.

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3500, retaining a bullish near-term tone as spot holds above the 60-day exponential moving average (EMA) at 1.3403 and the broken downward resistance trend line now offering support around 1.3456. The Relative Strength Index (14) at 61.1 leans into positive territory, suggesting buyers remain in control while momentum is not yet stretched into overbought conditions.

On the downside, immediate support emerges at the former trend-line cap turned floor near 1.3456, followed by the 60-day EMA at 1.3403, where a deeper pullback would be expected to attract fresh demand. As long as GBP/USD defends these layers of underlying support, the pair would likely continue to favor the topside, with bulls eyeing further gains above the recent 1.3509 close in the sessions ahead.

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British Pound rallies to over one-week high as fiscal woes and rate gap hammer Yen

  • GBP/JPY gains strong positive traction at the start of a new week amid a broadly weaker JPY.
  • Japan’s fiscal concerns offset the recent intervention and exert heavy pressure on the JPY.
  • The wide UK-Japan rate gap keeps the JPY carry trade active and further supports spot prices.

The GBP/JPY cross catches aggressive bids at the start of a new week and builds on its strong recovery move from the vicinity of mid-209.00s, or the lowest level since early March touched last Monday. The momentum lifts spot prices to an over one-week high, around the 214.00 neighborhood, during the early part of the European session and is sponsored by a broadly weaker Japanese Yen (JPY).

Following a brief surge driven by a joint US-Japan intervention, the JPY resumes its downtrend amid concerns about Japan’s worsening fiscal conditions stemming from Prime Minister Sanae Takaichi’s aggressive economic stimulus and tax cuts. In fact, Japan’s ruling Liberal Democratic Party (LDP) backed a proposal to cut the food consumption tax from 8% to 1% for two years starting in April 2027. Adding to this, the Japanese government proposed roughly ¥600 billion a year in cash transfers targeted at low- and middle-income households as part of a relief package.

Furthermore, the wide interest rate gaps between Japan and other major economies, including the UK, keep the so-called carry trade active and exert additional pressure on the JPY. The Bank of Japan (BoJ) lifted the short-term policy rate in June to 1.00%, or the highest since 1995, while the Bank of England’s (BoE) base rate is at 3.75%. This leaves a gap of around 275 basis points (bps), which, in turn, favors GBP/JPY bulls. Meanwhile, the strong intraday move up seems rather unaffected by a relatively hawkish BoJ Summary of Opinions from the July 30-31 meeting.

Market participants now look to this week’s release of the quarterly UK GDP report, which will play a key role in influencing the British Pound (GBP). The aforementioned fundamental backdrop, however, suggests that the recent corrective decline from the 219.60 region, or a multi-year top touched in July, has run its course and backs the case for a further near-term appreciating move for the GBP/JPY cross.