GBP/USD Price Forecast - Pound Holds 1.36 as Softer US CPI Revives June Fed Cut Expectations

GBP/USD – price, trend and macro context

GBP/USD – current price action and channel structure

GBP/USD trades around 1.3615–1.3622 after failing to sustain the spike toward 1.3850–1.3858. The pair has eased for three to four sessions in a row, with a tiny weekly gain of roughly 0.12%, but the pullback is happening inside a rising channel, not in a broken trend. The lower boundary of that channel sits near 1.3580, just below spot, which is why dips into 1.3590–1.3600 are being defended instead of accelerating lower. Price is consolidating above structural supports rather than reversing the up-move that started around the low-1.30s.

GBP/USD – daily trend, moving averages and key levels

On the daily chart, GBP/USD remains in an upward structure. Price trades above the 50-day EMA near 1.3524, with the 50-, 100- and 200-day averages all sloping higher. The 200-day SMA around 1.3437 still defines the major floor. The February low at 1.3510 and the rising trend line from roughly 1.3035 (support now around 1.3490) are the first line of defence before the long-term average. The 20-day SMA close to 1.3630–1.3631 has flipped into immediate dynamic resistance; recent daily closes have been fractionally below it, signalling loss of upside momentum but not a reversal. As long as closes stay above 1.3510 and well above 1.3437, the medium-term bias in GBP/USD remains bullish, with current weakness classed as a correction inside an ongoing uptrend.

GBP/USD – intraday squeeze and Fibonacci map

On the 4-hour chart, GBP/USD is compressing between a rising support line and a descending line drawn from the 1.3870 swing high. That squeeze is centred on the 0.618 Fibonacci retracement area around 1.3580, which also aligns with the lower boundary of the ascending channel seen on the higher time frame. Immediate resistance is clustered around 1.3632–1.3635, where the nine-day EMA and the 4-hour 50-period moving average cap rallies. A heavier resistance band sits at 1.3690, a 0.382 retracement and prior intraday cap, then 1.3760 and the 1.3858–1.3869 highs. On the downside, support levels stack at 1.3590, then 1.3550, 1.3510 and the 1.3437 200-day SMA. A clean break and close below 1.3580–1.3590 would confirm a deeper correction toward 1.3550 and 1.3510, while a move back above 1.3690 would re-open the path to 1.3760 and then the 1.3850–1.3869 zone.

GBP/USD – momentum indicators and what they imply

The 14-day RSI sits around 51 after dropping from overbought territory when GBP/USD pushed through 1.37 and briefly touched above 1.38. That move back toward the 50 line signals cooling momentum and a range-bound phase, not a full reversal. A renewed push above 60 on the daily RSI would show that buyers are regaining control and would put a retest of the upper channel area near 1.4150 and the 1.4248 high from April 2018 back on the radar. On intraday charts, smaller candle bodies and neutral momentum readings show that selling pressure is not aggressive; dips into support are being absorbed, but there is no conviction yet to chase upside through the immediate resistance band.

USD backdrop – DXY, NFP and CPI impact on GBP/USD

The US Dollar Index trades around 96.96–97.10 and remains firm after a stronger-than-expected January jobs report and ongoing risk-off flows. Nonfarm payrolls added roughly 130,000 positions in January, close to double consensus, while weekly initial jobless claims printed at 227,000, only slightly above forecasts and still low in historical terms. Continuing claims at 1.86 million hint that re-employment is slower but not stressed. This combination has pushed the probability of the Fed holding rates in March to roughly 94% and shifted expectations toward about 63 basis points of easing by year-end instead of an aggressive cutting cycle. At the same time, January CPI cooled to 2.4% year-on-year from 2.7%, with core inflation at 2.5% versus 2.6% previously, confirming that disinflation is back on track and supporting June cut pricing. Technically, DXY is rebounding from a messy support zone around 96.02–96.34, with higher lows forming toward the 0.5 Fibonacci level and 50-period moving average near 97.21 and the 0.618 area around 97.60. A move into 98.00–98.50 would be a fresh headwind for GBP/USD; failure back toward 96.50 would ease that pressure.

UK backdrop – BoE stance, Starmer noise and data pipeline

Sterling is being pulled in both directions by domestic factors. On the positive side, the medium-term uptrend remains intact and GBP has been one of the stronger majors this week, posting gains versus the US Dollar on a weekly basis, even if they are modest. On the negative side, the combination of softer UK GDP data and the Bank of England’s recent communication has raised the probability of policy easing later in 2026. Markets now see around a 64% chance of a 25-basis-point rate cut at the BoE’s 19 March meeting. BoE’s Huw Pill has maintained a relatively hawkish line, stressing that core inflation is the key and that policy must stay restrictive for now, which is helping to cap the downside for the pound. Politically, noise around Prime Minister Keir Starmer and the US ambassador nominees linked to Jeffrey Epstein briefly questioned his leadership, but cabinet backing has limited the damage and avoided a disorderly risk-premium spike in GBP. Next week’s UK calendar is heavy: labour-market figures, inflation and Retail Sales will all feed into BoE expectations and can either reinforce or challenge the 1.35–1.38 range currently priced into GBP/USD.

GBP/USD – directional bias, risk zones and Buy/Sell/Hold call

Structurally, GBP/USD remains in an uptrend while above 1.3510 and, more importantly, above the 200-day SMA at 1.3437. Price action around 1.3580–1.3600 is critical: that band combines the lower channel boundary, the 0.618 retracement and explicit horizontal support. Holding above 1.3580 keeps the move from the low-1.30s alive and argues that current weakness is a pause before another attempt at 1.3690, then 1.3760 and the 1.3850–1.3869 zone. A decisive close below 1.3580, especially if accompanied by an RSI break under 45 and a drop through 1.3550, would confirm a deeper correction toward 1.3510 and possibly the 1.3437 region. Given the current configuration – rising long-term averages, a still-intact ascending channel, DXY strength that is firm but not explosive, and BoE cuts priced later than the Fed – the bias for GBP/USD is moderately bullish with clear downside risk if 1.3580 gives way. On that basis, the stance is Buy on dips into 1.3550–1.3600 with a medium-term target back toward 1.3760 and 1.3850, and a structural risk line below 1.3510 where the case shifts toward a deeper correction rather than a continuation.

That's TradingNEWS