• GBP/USD flatlines near 1.3330 in Monday’s early European session.
• The negative outlook of the pair remains intact below the 100-day SMA, with bearish RSI momentum.
• The immediate resistance level emerges at 1.3335; the initial support level is located at 1.3250.

The GBP/USD pair holds steady around 1.3330 during the early European trading hours on Monday. Traders continue to assess the US interest rate path after Federal Reserve (Fed) Chair Kevin Warsh’s remarks. All eyes will be on the UK jobs data on Tuesday. On Wednesday, the UK Consumer Price Index (CPI) inflation report will be in the spotlight.

During the 2026 IMF-World Bank annual meetings in Bangkok on Friday, the Fed Chairman said that he does not “prejudge” interest-rate decisions, giving no preview of whether the central bank will hike or hold short-term rates steady at its upcoming October 27-28 meeting.

Fed funds futures are pricing an implied 84% chance that the US central bank stays on hold at its next two-day meeting on October 28, according to the CME FedWatch tool.

UK economic data later this week are likely to help seal the deal on the first rate hike from the Bank of England (BoE) in over three years in November. “We expect a 25-basis-point hike at the central bank’s next meeting in November. We also see another move in February,” said Bloomberg Economics chief UK economist Dan Hanson.

Pound resilience masks growing UK consumer strains and rate repricing risks

Analysts at MUFG note that the Pound “continues to show resilience,” with recent economic data reinforcing expectations of further monetary tightening by the BoE. They point out that the Pound is “roughly unchanged versus the US Dollar since the end of June,” with only the energy-linked CAD and NOK outperforming, alongside the Yen, which has been supported by “yen buying intervention by the MoF, with assistance from the US.” In this context, MUFG argues that “the pound has done well on the back of improving sentiment and evidence of economic resilience.”

That resilience has been underpinned by stronger-than-expected growth figures. MUFG highlights that “the GDP data again was stronger than expected – the m/m gain of just 0.1% was modest but still better than expected, helping the 3mth/3mth rate to 0.7%, 0.2ppt stronger than expected.” They add that the three‑month gain “was helped by services activity,” although the “one-month reading was flat in August and could be a sign of weakening momentum.” Within services, the breakdown “showed consumer-facing weakness,” while a Bloomberg Intelligence survey “indicated vulnerabilities that could see a slowing in the months ahead.”

Those vulnerabilities are already showing up in credit dynamics. MUFG flags that the BoE’s quarterly Credit Conditions Survey “revealed an increase in defaults on credit card debt for the sixth consecutive quarter underlining the increased strains on UK consumers.” Despite this, “these exposures are increasing with consumer credit up GBP 2.5bn in August to a new record high.” MUFG cautions that “if rates remain around these levels, it’s very likely that these figures will deteriorate further in the final quarter of the year.”

As a result, the bank sees a tension between the recent data and the outlook. “So while the backdrop of the economic data has been positive, the outlook does point to increasing risks,” MUFG writes. They note that “the OIS market indicates 100bps of tightening is priced by next September” but reiterate that “we continue to doubt the BoE delivering that, especially following the comments from Chief Economist Huw Pill who stated this week that he is sceptical that the UK will require four 25bp rate hikes.” Even so, MUFG concedes that “it will be difficult for the markets to adjust lower given the global backdrop of higher rates.”

In their view, this leaves the Pound exposed if the global rate environment turns. “In circumstances of a broader move back lower in rates, UK rates could fall more notably,” they argue, warning that “the pound remains vulnerable to signs that recent economic resilience could be undermined by the notable move higher in yields.”

Bailey frustration on inflation keeps GBP supported but cautious

FXS Speechtracker scores this speech at 6.2, slightly below Governor Bailey’s historic 6.4 average, pointing to a marginally softer tone overall. Bailey’s frustration with above-target UK inflation and comments that the economy is “more resilient than we expected, not as strong as we need” lean mildly hawkish, as they keep the door open to maintaining restrictive policy for longer.

However, remarks that it is “too early to form strong views on the strength of 2nd round effects” and that such effects are “subdued” with businesses focused on cost cutting temper the hawkishness. For GBP, the mix suggests limited immediate upside, with support from ongoing inflation concerns but capped by caution over second-round dynamics and external risks such as Middle East-driven moves in UK gilt yields.

Technical Analysis: GBP/USD remains capped under the 100-day SMA

In the daily chart, GBP/USD holds below the 100-day simple moving average (SMA) and thus retaining a capped, mildly bearish near-term bias. Price is hovering just under the upper Bollinger Band, suggesting upside attempts are meeting supply, while the Relative Strength Index (RSI) at 52.4 has turned neutral, hinting that recent recovery momentum is losing traction rather than evolving into a sustained bullish trend.

On the topside, initial resistance level is aligned at the upper boundary of Bollinger Band around 1.3335, with a more meaningful barrier at the 100-day SMA at 1.3390. A daily close above this level could see a rally to the September 9 high of 1.3568. 

On the downside, the Bollinger middle band, a 20-day SMA now around 1.3250, offers the first layer of support ahead of the lower band near 1.3165. A breach of the mentioned level could expose the November 20, 2025 low of 1.3038.