GBP/USD Technical Outlook — Pound Strengthens as UK GDP Beats Forecasts

IMF Chief Economist Pierre-Olivier Gourinchas said Tuesday that the Bank of England should exercise “extreme caution” when considering future interest rate cuts, as inflation in the UK is expected to remain the highest among G7 economies this year and next. The IMF forecasts Britain’s GDP growth at 1.3% in both 2025 and 2026 — 0.1% higher and 0.1% lower, respectively, than its July projections. Speaking at King’s College, Bank of England member Alan Taylor noted that inflation is expected to slow by 2026, while U.S. President Donald Trump’s tariffs are likely to harm economic growth rather than drive prices higher, since export goods unable to reach U.S. markets will seek alternative destinations.

Meanwhile, U.S. investors remain worried about the ongoing government shutdown, which continues to weigh on national growth. This week, the Senate once again rejected a temporary funding bill for the federal government. Although mass layoffs among civil servants have yet to alter the Democratic Party’s stance, many analysts agree that eventual approval of the bill is only a matter of time. Market participants are now focused on the upcoming Federal Reserve meeting scheduled for October 29, where expectations are almost unanimous for another 25-basis-point rate cut. Some analysts also see a possibility of stronger easing measures and dovish meeting minutes, as recent U.S. data releases have contained little negative surprise.

Traders are also watching rising trade tensions between the U.S. and China, which could have global repercussions. UK investors, however, are more concerned about EU steel import tariffs, given that London remains one of the region’s main suppliers. Significant duties could hurt Britain’s steel industry, as domestic producers would struggle to compete internationally with cheaper Chinese steel.

Support and Resistance Levels

Bollinger Bands on the daily chart show flat dynamics: the price channel remains wide enough for current volatility. MACD continues to rise, maintaining a solid buy signal with the histogram above the signal line. The Stochastic oscillator shows a more confident upward movement but is nearing the overbought zone, signaling short-term risks of a pound correction.

Resistance levels: 1.3450, 1.3500, 1.3554, 1.3600.

Support levels: 1.3413, 1.3364, 1.3300, 1.3250.

Trading Scenarios and GBP/USD Forecast

Short positions may be opened after a confident break below 1.3364 with a target at 1.3250. Stop-loss — 1.3413. Estimated duration: 2–3 days.

Further bullish development and a breakout above 1.3450 could signal new long entries with a target at 1.3554. Stop-loss — 1.3400.