GBP/USD Price Forecast: Keeps the red near 1.3350 as traders await BoE rate decision

GBP/USD struggles to capitalize on the previous day’s strong move up to the weekly top.
Escalating US-Iran tensions and Fed hike bets revive USD demand, weighing on the pair.
Bears seem hesitant amid the mixed technical setup and ahead of the BoE rate decision.

Haresh Menghani FXStreet

The GBP/USD pair meets with fresh supply on Thursday and retreats further from the weekly high, around the 1.3385-1.3390 region, touched the previous day. Spot prices stick to modest intraday losses through the first half of the European session and currently trade around mid-1.3300s amid a broadly firmer US Dollar (USD).

Following the previous day's post-FOMC decline, the USD regains positive traction as rapidly changing inflationary dynamics due to volatile oil prices keep the US Federal Reserve (Fed) rate hike bets firmly on the table. Apart from this, escalating US-Iran tensions turn out to be another factor underpinning the safe-haven Greenback. The downside for the GBP/USD pair, however, seems cushioned as traders opt to wait for the crucial Bank of England (BoE) decision and important US macro data.

From a technical perspective, the previous day's strong move up faced rejection near the 100-period Simple Moving Average (SMA) on the 4-hour chart. The subsequent pullback suggests that the recovery from the lowest level since July 2 might have run out of steam. However, the Relative Strength Index (RSI) around 55 and the Moving Average Convergence Divergence (MACD) turning positive hint at improving momentum. This warrants some caution before placing bearish bets on the GBP/USD pair.

That said, a clear break above the nearby SMA resistance at 1.3385 is still needed to unlock further upside. Spot prices might then climb to the 38.2% Fibonacci retracement of the June-July rally, at 1.3398, en route to the 23.6% retracement at 1.3459. On the downside, initial support aligns at the 61.8% Fibo. retracement at 1.3299, with a deeper floor at the 78.6% level near 1.3229. A sustained break below the latter would weaken the current constructive bias and expose the June swing low, around 1.3140.

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

GBP/USD 4-hour chart

Economic Indicator

BoE's Governor Bailey speech

Andrew Bailey is the Bank of England's Governor. He took office on March 16th, 2020, at the end of Mark Carney's term. Bailey was serving as the Chief Executive of the Financial Conduct Authority before being designated. This British central banker was also the Deputy Governor of the Bank of England from April 2013 to July 2016 and the Chief Cashier of the Bank of England from January 2004 until April 2011.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.