GBP/USD Price Steady Near 1.3520 as Traders Await US CPI and UK GDP
During Thursday’s early European session, the GBP/USD pair traded slightly higher, holding near the 1.3520–1.3530 region...
Quick overview
- The GBP/USD pair is trading slightly higher, supported by expectations of a U.S. Federal Reserve interest rate cut.
- Market confidence in a dovish Fed is bolstered by recent labor market weakness and lower-than-expected PPI data.
- Investors are awaiting U.K. GDP and manufacturing figures, with stagnation expected to raise concerns over economic momentum.
- Technically, GBP/USD is consolidating near 1.3520, with potential downside if it breaks below this level.
During Thursday’s early European session, the GBP/USD pair traded slightly higher, holding near the 1.3520–1.3530 region. Sterling remains supported by growing market confidence that the U.S. Federal Reserve will cut interest rates at its upcoming policy meeting, while traders cautiously await both U.S. inflation data and upcoming U.K. growth figures.
Fed Rate-Cut Bets Bolster Sterling
The U.S. dollar has been calm as investors digest signs of weakness in the labor market. Earlier this week, a benchmark revision showed 911,000 fewer jobs created over the past year than previously reported, reinforcing the case for monetary easing. According to CME FedWatch data, traders now assign an 8.4% probability of a 50-basis-point cut, though the consensus remains for a 25-bps move.
Recent comments from FOMC members also suggested tariffs’ inflationary impact will be temporary, adding to expectations of a dovish Fed. U.S. PPI data came in weaker than forecast at -0.1%, while attention now turns to Thursday’s CPI release, expected to show a 0.3% monthly gain and 2.9% annual increase. A soft print would likely weigh further on the dollar, while a hotter reading could delay deeper cuts.
UK Data and BoE Policy Outlook
On the U.K. side, investors are watching July GDP and manufacturing figures due Friday. After June’s 0.4% GDP growth, July is expected to show stagnation, raising questions over the economy’s momentum. While the Bank of England is seen holding rates at 4% in its next meeting, slowing growth could strengthen the case for rate cuts later this year.
Still, the British economy’s relative resilience and limited exposure to global tariff risks are offering underlying support to sterling.
GBP/USD Price Forecast
Technically, GBP/USD is trading near 1.3518, with the pair consolidating inside a symmetrical triangle pattern on the 2-hour chart. The recent failure to break higher from 1.3562 triggered selling pressure, with price now testing the lower boundary near the 50-SMA at 1.3527.
The RSI at 44 points to weakening momentum, and a decisive break below 1.3520 could expose the 200-SMA at 1.3477, followed by support at 1.3446. On the upside, a recovery above 1.3562 would open the path to 1.3591 and 1.3621.
Trade Idea: A short entry near 1.3520–1.3530 with a stop above 1.3565 could target 1.3480 and 1.3446. For beginners, this means traders are betting on further downside unless the pound breaks above its recent resistance.
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