Following the latest FOMC decision, Fed Chair Jerome Powell stated that policymakers could consider monetary easing if the labor market cools further. According to the CME FedWatch Tool, markets now assign a 93.4% probability of a 25 basis point rate cut on September 17, and a 59.9% chance in October—factors that continue to support GBP/USD.
In the UK, the Nationwide House Price Index for July outperformed, posting a 0.6% monthly gain (vs. 0.5% forecast) and 2.4% y/y (vs. 2.1%). The inflation trend remains elevated, with CPI accelerating from 3.4% to 3.6% and core inflation rising from 3.5% to 3.7%. However, GDP fell 0.1% for a second consecutive month, highlighting the Bank of England’s dilemma: support growth or fight inflation. Today’s rate decision (13:00 GMT+2) is widely expected to bring a 25 bp cut to 4.00%, but full consensus is lacking. Traders will watch Governor Andrew Bailey's speech (13:30 GMT+2) and the vote split for further guidance.
GBP/USD eyes key resistance after US data shockTechnical Analysis: Trends and Key Levels
The long-term trend remains bullish. In July, GBP/USD entered an extended correction, breached 1.3400, and tested support at 1.3170. Now, a break above 1.3400 would target 1.3580, with further resistance at 1.3760.
The medium-term trend turned bearish last week, with price falling below the 1.3436–1.3401 support area and moving toward 1.3084–1.3049. Short setups may be considered on corrections from the resistance zone at 1.3526–1.3491, with targets at 1.3333 and 1.3139.
- Resistance: 1.3400, 1.3580, 1.3760
- Support: 1.3170, 1.3000, 1.2760
Trading Scenarios
- Buy stop: Enter long above 1.3400, targeting 1.3580. Stop loss: 1.3325. Time frame: 9–12 days.
- Sell stop: Enter short below 1.3325, targeting 1.3170. Stop loss: 1.3395.
Summary: GBP/USD is gaining traction on softer US jobs data and shifting Fed expectations. The next directional move will likely hinge on the Bank of England's policy decision and forward guidance. Watch for a break above 1.3400 or a reversal below 1.3325.