British Pound holds ground as US Consumer Sentiment deteriorates

GBP/USD trades near 1.3231 as the US Dollar edges higher.
US Consumer Sentiment Index drops to 46.3 in October.
One-year inflation expectations rise to 4.7%, reinforcing Fed concerns.

Christian Borjon Valencia FXStreet

The Pound Sterling (GBP) holds firm against the US Dollar (USD) on Friday, which posts modest gains against a basket of six currencies, while US consumers grow pessimistic about the economy as the US-Iran conflict drags on for another week. The GBP/USD trades at 1.3231 at the time of writing, broadly unchanged.

Sterling steadies despite high US Treasury yields; inflation expectations climb across US households

The US Dollar Index (DXY), which measures the performance of the US Dollar against its peers, is up 0.16% to 102.27.

Data from the University of Michigan showed the Consumer Sentiment Index in October diving from 48.1 in September to 46.3, missing forecasts of 47.6. The report showed that the economy’s trajectory has weakened since the start of 2026. US households raised one-year inflation expectations to 4.7% from 4.6% and five-year expectations to 3.5% from 3.4%.

Market attention shifts to the release of US consumer and producer inflation. Also, Retail Sales, further jobs data, and Fed speakers could dictate the path of interest rates as the October FOMC meeting looms.

Fed interest rate expectations remain unchanged for October, with investors seeing an 81% chance of keeping rates unchanged. For the December meeting, they expect 21 basis points of tightening, with the odds for an increase being at 87%, according to Prime Terminal.

Fed interest rate probability - Source: Prime Terminal

In the meantime, US Treasury yields continue to rise, indicating that investors continue to price in a higher premium due to expectations of higher living costs.

In the UK, eyes are on high energy prices, and investors are bracing for the release of Chancellor John Healey’s Autumn Budget.

The schedule will feature UK Retail Sales, a speech by the BoE Chief Economist Pill and the release of GDP figures.

GBP/USD Price Forecast: Technical outlook

Chart Analysis GBP/USD — GBP/USD daily chart

In the daily chart, GBP/USD trades at 1.3229, keeping a bearish near‑term tone as spot remains decisively below the cluster of longer‑term simple moving averages around 1.3439 and a series of former rising trend‑line supports now acting as overhead barriers near 1.3360 and above. The Relative Strength Index (14) at 38.47 stays on the soft side of neutral, which hints at lingering downside pressure while falling short of oversold extremes, suggesting sellers retain control unless price can reclaim the mentioned structural caps.

On the topside, initial resistance is located at the broken upward trend line coming in around 1.3360, followed by the grouped 50/100/200‑day simple moving averages near 1.3439, which reinforce the broader bearish bias. Above there, a prior descending resistance line caps the market around 1.3508, with another downtrend barrier near 1.3544 and a higher former support trend line turned resistance around 1.3606, levels that would need to be cleared to alleviate the current downside pressure; with no nearby supports mapped below spot from this dataset, any fresh lows would leave the pair exposed to further bearish extension until a new base is formed.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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