GBP/USD Price Forecast: Continues to remain flat ahead of US CPI data

GBP/USD trades sideways around 1.3500 ahead of the US CPI and the UK Q2 GDP data.
The US headline and core CPI are expected to arrive lower at 3.4% and 2.5% YoY, respectively.
Investors expect the UK Q2 GDP growth to have slowed down to 0.4%.

Sagar Dua FXStreet

The British Pound (GBP) remains in a limited range at around 1.3500 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair is expected to remain sideways, with investors awaiting the United States (US) Consumer Price Index (CPI) data for July in the North American session and the United Kingdom (UK) Q2 Gross Domestic Product (GDP) data on Thursday.

Investors expect the US CPI data to have a meaningful impact on Federal Reserve (Fed) interest rate expectations, as comments from Chairman Kevin Warsh in the July policy meeting press conference signaled heightened concerns regarding upside inflation risks.

Analysts at Danske Bank highlight that “today's most important data release will be the US July CPI,” with the bank forecasting “headline inflation at 0.2% MoM SA, 3.4% YoY (prior: -0.4% MoM, 3.5% YoY) and core inflation at 0.2% MoM SA, 2.5% YoY (prior: 0.0% MoM, 2.6% YoY).” The projections point to a modest month-on-month rebound in both headline and core price pressures, alongside slightly lower annual rates compared with June.

On Thursday, the UK Q2 GDP data is expected to arrive lower at 0.4% from 0.6% in the first quarter this year. On an annualized basis, the GDP growth is seen at 1.1%, faster than the previous reading of 0.9%.

GBP/USD Technical Analysis

GBP/USD trades at around 1.3500 above the 20-day exponential moving average (EMA) at 1.3437 and has broken through the downward resistance trend line, now offering support around 1.3465, which together suggests a constructive bullish bias while price consolidates near recent highs.

The Relative Strength Index (14) at about 60 keeps upward momentum intact without yet entering overbought territory, hinting that buyers still control the near-term direction as long as spot remains anchored above these supports.

On the downside, initial support is seen at the former trend-line break level near 1.3465, followed by the 20-day EMA at 1.3437, where a deeper pullback would be expected to attract dip-buying interest. Below the 20-day EMA, the pair would be exposed to the July 28 low at 1.3273. Looking up, the pair could advance towards 1.3600 if it rebounds above the August 10 high at 1.3530.

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

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

AUD/USD seems vulnerable near 0.6800, 10-month low amid bullish USD

AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.

USD/JPY bulls turn cautious near 160.00 amid intervention risks

USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.

Gold remains on the back foot below $3,900

Gold now alternates gains with losses below the $3,900 mark per troy ounce on Friday. The precious metal struggles to regain traction amid the firmer US Dollar, mixed US Treasury yields and expectations of further tightening by the Fed at its December meeting.

Bitcoin just posted five straight losing weeks, and the storm may not be over yet

Bitcoin is struggling to find support, slipping below $70,000 as multiple headwinds threaten to push the Crypto King lower. The much-anticipated “Uptober” rally failed to materialize, with persistent selling pressure and widespread liquidations instead reinforcing the “Rektober” narrative.

Week ahead – Fed Minutes, inflation data and Nvidia earnings to guide investors

Fed minutes may add to hawkish tone as bets of 50-bps hike grow. Nvidia to report earnings as bar to impress high after spy scandal. Trade and geopolitics to be focal point of Trump-Xi summit.

Gold hit its lowest level of 2026 near $3,850

Gold (XAU/USD) attempts to stabilize around $3,890 on Friday after falling to $3,852 on Thursday, its lowest level since October 2025. The precious metal has lost more than 4% this week, as investors increasingly anticipate further monetary tightening from the Federal Reserve (Fed). The latest decline reflects a sharp change in market expectations.