GBP/USD Declines as UK Inflation Cools and U.S. Shutdown Drags

Today’s focus is on UK macroeconomic data. The Core Consumer Price Index for September eased from 3.6% to 3.5%, while the broader CPI slowed to 3.8% year-over-year and from 0.3% to 0.0% month-over-month. The Retail Price Index also fell—from 4.6% to 4.5% annually, and from 0.4% to –0.4% monthly. The rise in inflation was largely anticipated, as Bank of England officials have repeatedly signaled concern. Nevertheless, these figures will influence future rate-cut decisions. Some Monetary Policy Committee members suggested that further easing should wait until at least March 2026. Additional pressure on the pound came from the UK’s Public Sector Borrowing report, which showed an increase from £15.32 billion to £20.24 billion versus forecasts of £20.50 billion.

In the United States, few macro releases are expected as the ongoing government shutdown continues. The Senate has rejected the Republican funding bill for the 11th time, despite growing pressure on Democrats from the White House. Massive furloughs have affected federal agencies — the Department of Energy has temporarily sent home employees of the National Nuclear Security Administration (NNSA), except those in critical roles.

Support and Resistance Levels

On the daily chart, Bollinger Bands show a moderate decline with the upper band narrowing, signaling a short-term shift in momentum. The MACD indicator turns downward, preparing a sell signal as the histogram aims to move below the signal line. Meanwhile, the Stochastic oscillator has rebounded from overbought levels and is turning lower, suggesting potential for further correction in the near term.

Resistance levels: 1.3413, 1.3450, 1.3500, 1.3554.
Support levels: 1.3350, 1.3300, 1.3250, 1.3200.

Trading Scenarios and GBP/USD Forecast

Short positions can be opened after a confident breakdown below 1.3350 with a target of 1.3250 and a stop-loss at 1.3413. Estimated time frame: 1–2 days.

A rebound from 1.3350 followed by a breakout above 1.3413 may serve as a signal for long positions targeting 1.3500 with a stop-loss at 1.3350.