GBP/USD Price Forecast: Trades vulnerably near 1.3300 ahead of Fed-BoE policy

GBP/USD reflects caution at around 1.3300 in the countdown to the Fed’s policy.
Both the Fed and the BoE are expected to leave interest rates steady.
The CME FedWatch tool shows a meaningful chance of an interest rate hike by the Fed in September.

Sagar Dua FXStreet

The British Pound (GBP) trades with caution at around 1.3300 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair is marginally higher, but is broadly under pressure, with investors turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

Investors expect the Fed to leave interest rates unchanged in the range of 3.50%-3.75% and warn of upside inflation risks. However, United States (US) President Donald Trump said on Monday that Fed Chairman Kevin Warsh should lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.

On the contrary, the CME FedWatch tool reflects traders seeing the monetary policy adjustment on the hawkish side. There is an 80.8% chance that the Fed will deliver an interest rate hike in September, the tool shows.

This week, investors also await the Bank of England’s (BoE) monetary policy announcement on Thursday, in which it is expected to keep interest rates steady at 3.75%, with a 7-2 majority.

GBP/USD technical analysis

GBP/USD trades marginally higher at around 1.3300, but is holding a bearish near-term bias as it remains capped beneath the 20-period Exponential Moving Average (EMA) at 1.3358 and below the broader descending resistance trend line that projects from the 1.3862 area.

The Relative Strength Index (14) near 43 stays below the midline, hinting that downside pressure persists rather than signaling an oversold condition, while the pair consolidates closer to underlying trend-line support than to the overhead resistance cluster.

On the topside, initial resistance is located at the 20-day EMA around 1.3360, with further supply expected near the prior resistance trend-line break zone at 1.3487. On the downside, the market finds structural support around the horizontal support of the Descending Triangle formation, where a sustained break would likely open the door to the psychological level of 1.3000.

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

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

AUD/USD sits near a one-month top, above 0.7000 amid fresh USD selling

AUD/USD holds above 0.7000 through the Asian session, trading near a one-month high touched earlier this Monday amid renewed US Dollar selling. US bond yields decline further amid a modest pullback in crude oil prices, capping the USD recovery from a three-week low. Moreover, bets for a November RBA rate hike support the Aussie, though upside seems capped ahead of the crucial two-day FOMC meeting, starting Tuesday.

USD/JPY struggles below 157.00 on weak USD; holds above one-month low ahead of Fed, BoJ meetings

USD/JPY attracts fresh sellers during the Asian session on Monday, stalling its recovery from the lowest level since September 18, touched Friday as a further decline in US bond yields weighs on the US Dollar. Meanwhile, the Japanese Yen benefits from a more hawkish BoJ, further weighing on the currency pair. The downside, however, seems limited as traders keenly await Fed and BoJ policy meetings later this week.

Gold holds on just above $4,000

Gold clings to daily gains, leaving behind two daily drops in a row and reclaiming the key $4,000 mark per troy ounce and above on Monday. The better tone in the US Dollar and mixed US Treasury yields accompany the precious metal’s uptick, while declining crude oil prices appear to sustain the bounce for now.

Bitcoin stalls around $80,000 as geopolitical tensions dampen risk appetite

Bitcoin hovers around $80,500 on Monday after three straight weeks of correction. Rising geopolitical tensions in the Middle East continue to push oil prices higher, stoking inflation concerns and dampening risk appetite.

Everyone's bracing for a hawkish central bank week. Here's why the surprise could be dovish

Five of the world's major central banks are preparing to announce monetary policy decisions this week, with investors increasingly anticipating higher interest rates as the global energy shock continues to push inflation above target.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.