GBP/USD Price Analysis: Downside looks favored as US PCE data supports more rates from Fed

GBP/USD is looking vulnerable above 1.1940 amid the risk-off market mood.
The USD Index is gathering strength to reclaim the immediate resistance of 105.00 amid hawkish Fed bets.
Downward-sloping 20-and 50-period EMAs add to the downside filters.

Sagar Dua FXStreet

The GBP/USD pair is displaying a volatility contraction around 1.1940 in the early Tokyo session. The Cable looks set to deliver further weakness as a fresh renewal in the Federal Reserve’s (Fed) hawkish bets has strengthened the US Dollar.

S&P500 futures witnessed immense pressure last week on hopes that more rates are in pipeline by the Fed as the United States inflation has turned persistent due to the strong labor market. The US Dollar Index (DXY) is gathering strength to reclaim the immediate resistance of 105.00. A jump in the monthly US core Personal Consumption Expenditure (PCE) price index by 0.6% sent 10-year US Treasury yields to near 3.95%.

GBP/USD is auctioning in an Inverted Flag chart pattern on an hourly scale. The chart pattern indicates a sheer consolidation that is followed by a breakdown. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias.

It is worth noting that the Inverted Flag is forming around the horizontal support plotted from February 17 low at 1.1915. An inventory adjustment near crucial support indicates that bulls US Dollar bulls are gathering strength to discover more losses.

Downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 1.2007 and 1.975 respectively, add to the downside filters.

The Relative Strength Index (RSI) (14) is oscillating in the 20.00-40.00 range, which indicates that the downside momentum is active.

A confident break below February 17 low at 1.1915 will drag the Cable firmly towards January 5 low at 1.1875 followed by the round-level support at 1.1800.

On the contrary, a move above February 24 high at 1.2040 will drive the asset towards February 23 high around 1.2080. A breach of the latter will expose the asset to February 21 high of around 1.2140.

GBP/USD hourly chart

GBP/USD

Overview
Today last price	1.1949
Today Daily Change	0.0006
Today Daily Change %	0.05
Today daily open	1.1943

Trends
Daily SMA20	1.2109
Daily SMA50	1.2149
Daily SMA100	1.1941
Daily SMA200	1.193

Levels
Previous Daily High	1.2042
Previous Daily Low	1.1928
Previous Weekly High	1.2148
Previous Weekly Low	1.1928
Previous Monthly High	1.2448
Previous Monthly Low	1.1841
Daily Fibonacci 38.2%	1.1972
Daily Fibonacci 61.8%	1.1999
Daily Pivot Point S1	1.19
Daily Pivot Point S2	1.1858
Daily Pivot Point S3	1.1787
Daily Pivot Point R1	1.2014
Daily Pivot Point R2	1.2085
Daily Pivot Point R3	1.2127

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold remains depressed; eyes two-month low ahead of FOMC Minutes

Gold maintains its offered tone through the Asian session on Wednesday, trading within striking distance of a two-month trough, around the $4,100 neighborhood touched the previous day. Resurgent US Dollar demand is seen as a key factor exerting pressure on the commodity as traders now look forward to the FOMC meeting minutes for a fresh impetus.

Dogecoin extended correction and weakening momentum raise downside risks

Dogecoin extends its losses, trading around $0.090 down more than 5% so far this week. Bearish pressure is strengthening, with short positions reaching a one-month high and traders in overheated conditions. Meanwhile, weakening momentum indicators are also hinting at further losses in DOGE. Derivatives data shows cautious signals among traders.

France's government could fall over the budget. Here's what that would actually mean for the Euro

The Euro (EUR) is trading at its lowest level since May 2025, nearly 7% below its January peak, and France's government could fall over its 2027 budget before the end of November. A French government falling hasn't moved the Euro much by itself, so the risk to price is narrower: France losing its place under the emergency safety net the European Central Bank (ECB) keeps for government bonds.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.