GBP/USD Forecast: Pound Strengthens as UK GDP Growth Hits 1.4%

President Donald Trump accused Democrats of refusing to compromise on healthcare, including coverage for undocumented immigrants, while Senate Minority Leader Chuck Schumer noted “very significant” differences on key issues. Notably, the House of Representatives had approved a stopgap funding bill through November 21, but it failed to pass in the Senate, where Republicans hold 53 out of 100 seats, short of the 60 votes needed for approval.

The threat of a federal shutdown this week could delay the release of key labor market data, which in turn may influence the Federal Reserve’s policy path. In September, the Fed cut the policy rate by 25 basis points to 4.50% and signaled the possibility of further easing, though Chair Jerome Powell later cautioned against assuming additional cuts are preordained.

Meanwhile, the pound is supported by Tuesday’s second-quarter GDP data: quarterly growth slowed to 0.3% in April–June from 0.7% in Q1. This was unchanged from the initial Office for National Statistics estimate and in line with the Reuters consensus. On an annual basis, GDP was 1.1%, though adjustments to the quarterly trajectory mean the level by end-June was revised up from 1.2% to 1.4%. Adjusted for population growth—driven largely by high immigration—GDP per capita rose 0.9% in the year to end-June after stagnating in 2024. The UK economy grew the fastest among the G7 in H1, although one-off factors, including a surge in exports ahead of U.S. import tariffs, contributed. The Bank of England projects full-year growth of just 1.25% as businesses face mounting pressure from global trade instability and new taxes—potentially in the tens of billions of pounds—expected in the autumn budget.

At 10:30 (GMT+2) today, the UK will publish September S&P Global manufacturing PMI, expected to hold at 46.2. U.S. data follow at 15:45 (GMT+2) and 16:00 (GMT+2): the S&P Global index is seen steady at 52.0, while ISM manufacturing is expected to rise from 48.7 to 49.0.

Support and Resistance Levels

On the daily chart, Bollinger Bands are flattening horizontally; the price range is widening from the lower band, showing a muted response to the nascent corrective rebound in the near term. MACD has turned higher, generating a fresh buy signal (the histogram has moved above the signal line). Stochastic remains confidently upward, also favoring continued gains, but it is quickly approaching the 80 level, indicating short-term overbought risk for sterling.

Resistance levels: 1.3500, 1.3554, 1.3600, 1.3632.

Support levels: 1.3450, 1.3415, 1.3364, 1.3300.

Trading Scenarios and GBP/USD Forecast

Long positions may be considered after a confident break above 1.3500 with a target at 1.3600. Stop-loss at 1.3450. Timeframe: 2–3 days.

A rejection from 1.3500 as resistance followed by a break below 1.3450 could signal new short positions with a target at 1.3364. Stop-loss at 1.3500.