Weaker retail sales in Q2 (–0.6% after four quarters of growth) suggest that monthly GDP could show zero change, down from the previous 0.4% increase. This would slow annual GDP growth from 1.4% and pressure the pound. Construction is expected to contract from 0.3% to –0.2%, while industrial and manufacturing output may stagnate at 0.0%, down from 0.7% and 0.5%.

Deutsche Bank expects the Bank of England to delay its next rate move until December, citing the split in hawkish vs. dovish votes at the August meeting. HSBC analysts project that borrowing costs will remain unchanged until April 2026, revising earlier forecasts of quarterly adjustments.

Meanwhile, the US dollar is recovering near 97.80 in the USDX, supported by news that US federal judge Jia Cobb ruled President Donald Trump’s attempt to dismiss Fed Board member Lisa Cook unlawful. This means she will likely participate in the September 17 Fed meeting. Additionally, yesterday’s Producer Price Index (PPI) report, which showed a monthly decline of –0.1% versus forecasts of +0.3%, pulled annual PPI down to 2.6% (vs. 3.3% expected). This increased expectations that today’s CPI data at 14:30 (GMT+2) could also come in below consensus.

Support and resistance

On the daily chart, GBP/USD holds slightly above the resistance line of a descending channel with dynamic boundaries of 1.3450–1.3100.

Technical indicators are showing a buy signal: fast EMAs on the Alligator are just above the signal line, while the AO histogram is rising in the positive zone.

  • Resistance levels: 1.3590, 1.3790

  • Support levels: 1.3450, 1.3170

GBP/USD

Trading scenarios

  • Long positions can be opened above 1.3590, targeting 1.3790, with a stop-loss at 1.3500. Horizon: 7+ days.

  • Short positions may be opened if the price falls below 1.3450, targeting 1.3170, with a stop-loss at 1.3550.

Scenario

Timeframe: Weekly

Recommendation: BUY STOP

Entry Point: 1.3590

Take Profit: 1.3790

Stop Loss: 1.3500

Key Levels: 1.3170, 1.3450, 1.3590, 1.3790

Alternative scenario

Recommendation: SELL STOP

Entry Point: 1.3500

Take Profit: 1.3170

Stop Loss: 1.3550

Key Levels: 1.3170, 1.3450, 1.3590, 1.3790