The GBP/USD currency pair remains heavy and trading with a bearish bias for the fourth straight day. The fall was exacerbated when the UK consumer inflation figures were released. All these figures pointed to a significant deceleration in core inflation. Interestingly, the GBP/USD reached a new trough of the weekly low. This precipitous plunge brings into focus how much the British pound has struggled in today’s volatile economic environment.
As seen in late August and throughout September, the GBP/USD pair has faced several unsuccessful attempts to break through the key 1.3200 resistance level. This failure to make progress has weighed heavily on bearish sentiment amongst traders, setting the pair up for a potential cliff edge dive. The currency pair recently fell below a key technical indicator point. It has since then broken above this 200-day Simple Moving Average (SMA), which acts as a common resistance point at about 1.3100.
The short term barrier for GBP/USD right now is the 1.3155 to 1.3160 area. Analysts caution that the currency pair must break convincingly above this zone. Or else, it’ll soon be doomed to languish without the winds of upward momentum at its back. We might notice more declines if prices drop convincingly below the important threshold level of 1.3100. This would indeed open the door to the next major support area that sits just under the 1.2950 level.
Market participants have noted that spot prices of GBP/USD appear to have a path of least resistance directed towards the downside. ASX Daily Chart Oscillators on the daily chart have reset after moving into overbought territory. Consequently, they have since grown deeply rooted in the red. This technical outlook would indicate a largely bearish picture as traders consider the currency pair’s likely path going forward.
Traders are bracing for critical economic influences. T labor market developments Meanwhile, traders today will be eagerly following the release of the Federal Open Market Committee (FOMC) minutes. These minutes will again provide clues to the U.S. central bank’s evolving monetary policy stance. They are bound to make a significant ripple effect on the market sentiment, especially for GBP/USD. After a month of strike-related delays, the September Nonfarm Payrolls (NFP) report arrives this Thursday. It’s likely to set off much wider movements through the currency pair.
Should selling prevail through last week’s swing low at about 1.3085, further downside towards the 1.3000 major psychological level is expected by analysts. They view this as a real opportunity. As can be imagined, such a decline would accomplish nothing if not further cementing bearish sentiment and perhaps plunging the British pound into even greater selling pressure.
It will definitely be tough economically going into 2026. Fears about fiscal policy are weighing heavily on GBP sentiment. These worries are likely to be ongoing GBP/USD bearish undercurrents, adding to a generally risk averse market backdrop.
It’s all helped fuel a dynamic that until the surprise inflation print out of the UK Wednesday morning US could swagger about with relative impunity. The relevant core gauge, not counting volatile energy and food prices, showed a marked slowdown. It fell from a year-over-year growth of 3.5% in September to 3.4% in the month reported on. Traders are reacting to the inflationary slowdown described above. They are rethinking their stance, repricing expectations for what’s to come in terms of Bank of England monetary policy moves.