GBP/USD Forecast: Pound Supported by UK Inflation and Labour Data

The latest UK labour-market report showed a mixed but relatively resilient picture. The Claimant Count fell by 11.0 thousand in July, following a revised decline of around 6.5 thousand in the previous month and outperforming expectations for an increase. Employment rose by 83.0 thousand in the three months to June, down from an increase of 147.0 thousand in the previous period, while the unemployment rate remained at 4.9%. Annual growth in average earnings including bonuses stood at 4.1%, while regular pay excluding bonuses increased by 3.5%.

Inflation data released at the start of today's session provided additional support for sterling. In July, the Consumer Price Index accelerated from 0.1% to 0.3% month over month and from 2.6% to 2.9% year over year. Core CPI eased from 0.3% to 0.2% on a monthly basis, while the annual rate remained unchanged at 2.6%.

The U.S. dollar is trading slightly lower, with the USD Index hovering around 99.40 as investors increasingly focus on domestic monetary-policy signals. Attention now turns to the minutes of the Federal Reserve's July 28–29 meeting, due at 14:00 ET, for additional clues about the central bank's policy outlook. Meanwhile, the U.S. housing market showed renewed weakness: housing starts fell from a revised annualized rate of 1.415 million in June to 1.239 million in July, the lowest level since June 2024.

Support and resistance levels

On the daily chart, the instrument remains below the resistance line of the ascending channel, whose dynamic boundaries are currently located around 1.3710–1.3400.

Technical indicators are strengthening their bullish signal: the fast EMAs of the Alligator indicator remain above the slow line, while the AO histogram is forming corrective bars in positive territory.

Resistance levels: 1.3570, 1.3710.

Support levels: 1.3480, 1.3350.

GBP/USD trading scenarios and price outlook

Long positions may be opened after the price rises and consolidates above 1.3570, with a target at 1.3710. Stop-loss: 1.3470. Time horizon: 7 days or more.

Short positions may be opened after the price declines and consolidates below 1.3480, with a target at 1.3350. Stop-loss: 1.3570.