GBP/USD Forecast: Holding by a thread, bearish

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3803

The American dollar consolidates near its weekly high against most major rivals.
The US August Michigan Consumer Sentiment Index is expected at 81.2.
GBP/USD could accelerate its slump once below 1.3790, the immediate support level.

The GBP/USD pair consolidates at the lower end of its weekly range, trading around the 1.3800 level. Major pairs had been lifeless as volatility plummeted following the release of US July inflation, which spur some temporal and limited dollar’s weakness. However, the American currency has recovered most of the ground shed then and trades near weekly highs across the FX board. The pound is its weakest rival, while safe-haven JPY and Gold are the strongest.

Mixed UK data released on Thursday fell short of boosting sterling, despite signs of a firmer economic comeback in the second quarter of the year. The country won’t publish macroeconomic data on Friday, while the US will release the preliminary estimate of the August Michigan Consumer Sentiment Index, expected at 81.2.

GBP/USD short-term technical outlook

The GBP/USD pair is technically bearish and could extend its decline heading into the weekend. The pair posted a lower low at 1.3790, the immediate support level. In the 4-hour chart, the pair develops below all of its moving averages, with the 20 SMA heading firmly south between the longer ones. Technical indicators are directionless but remain within negative levels, reflecting bears’ dominance.

Support levels: 1.3790 1.3755 1.3710

Resistance levels: 1.3865 1.3910 1.3960

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 flatlines near 0.6965 as less hawkish RBA counters USD weakness

AUD/USD holds steady above a two-week low, trading near 0.6965 in the Asian session on Wednesday as early midterm election results heighten political uncertainty and weigh heavily on the US Dollar. Moreover, reviving safe-haven demand triggers a fresh leg down in US bond yields, offsetting Fed hike bets and exerting additional pressure on the buck. However, a less hawkish RBA caps the Aussie.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold reclaims $4,000 and above

Gold manages to regain some composure, leaving behind two consecutive daily pullbacks and reclaiming the area above the key $4,000 mark per troy ounce on Wednesday. The strong decline in the US Dollar, declining US Treasury yields and lower crude oil price all contributes to the yellow metal’s recovery.

Crypto Today: Bitcoin, Ethereum, XRP extend advance as US Dollar slides on Democrats' US midterm victory

Bitcoin trades above $78,000 on Wednesday as risk-on sentiment improves in the broader cryptocurrency market. Ethereum mirrors BTC’s recovery outlook, hovering above $2,300. Ripple similarly exchanges hands above $1.28, marking two consecutive days of gains.

US midterms 2026: Investor Q&A on the Democratic sweep

1. Gridlock replaces the stimulus narrative. A Democratic Congress would constrain Trump's ability to pursue additional fiscal expansion and legislative tax measures. But it cannot simply reverse the president's entire economic agenda. Executive powers, existing legislation and presidential vetoes remain important. 2. AI faces a higher hurdle, not an extinction event.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.