GBP/USD Forecast: Brexit hopes underpin the pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3258

Market rumors suggest that a trade deal could be announced in the next few days.
The United Kingdom will publish its October inflation data this Wednesday.
GBP/USD could extend its advance beyond 1.3315 but depends on Brexit progress.

The GBP/USD pair got boosted by market talks hinting a trade deal between the UK and the EU might be around the corner. The pair hit a daily high of 1.3272, now trading in the 1.3250 price zone, further underpinned by the broad dollar’s weakness. Trade talks have resumed in Brussels, and the encouraging headlines over a breakthrough were partially overshadowed by the potential failure of negotiations, as the two sides are still away on key points. Ireland Prime Minister Micheal Martin said that the UK economy is not prepared for a no-deal Brexit.

This Wednesday, the UK is set to publish October inflation figures. The annual CPI is foreseen at 0.6% in October, after printing 0.5% in September. The monthly inflation, however, is expected to have fallen by 0.1%. Additionally, BOE’s Governor Andrew Bailey is scheduled to speak in a public event.

GBP/USD short-term technical outlook

The GBP/USD pair has room to extend its advance, according to intraday technical readings. The 4-hour chart shows that technical indicators retreated from near overbought levels, but they remain well above their midlines, without clear directional strength. The 20 SMA aims modestly higher around 1.3190, while the larger ones maintain their bullish slopes below it. A substantial advance will be more likely on a break above 1.3313 this month´s high.

Support levels: 1.3210 1.3165 1.3120

Resistance levels: 1.3275 1.3320 1.3360

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold slides below $4,100 as Fed hike bets exert pressure ahead of US CPI

Gold extends its intraday descent and slides below the $4,100 mark, reversing a major part of the previous day's strong gains to the $4,150 resistance. Firming US Federal Reserve rate-hike expectations turn out to be a key factor driving flows away from the non-yielding bullion. Meanwhile, the US Dollar struggles to lure buyers amid mixed signals regarding the state of diplomatic talks between the US and Iran. This could offer some support to the commodity as traders seem hesitant ahead of US consumer inflation figures.

Bitcoin hits lowest weekly close since August as short-term holders slip into losses

Bitcoin fell below $75,000 on Tuesday, after recording its lowest weekly close since August as selling pressure pushed recent buyers into losses.

US CPI data set to ease in October as markets reassess Fed rate hike expectations

The US Bureau of Labor Statistics will publish the October Consumer Price Index data on Tuesday, a release that could influence the US Dollar valuation as investors reassess the Federal Reserve’s interest-rate outlook. The report won’t include 12-month percentage changes for most CPI series in this release, due to missing October 2025 monthly data because of the lack of collection during the government shutdown from October 1, 2025, to November 12, 2025.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.