GBP/USD Price Forecast - Pound At 1.34 As NFP And Fed–BoE Divergence Put 1.3380 Support To The Test

GBP/USD: Dollar Strength, Broken Trendline And Diverging Fed–BoE Paths Around 1.34

Short-Term Price Action In GBP/USD Around 1.3430

GBP/USD is trading around 1.3430–1.3435, sitting on its weekly low after failing to hold above the 1.3550–1.3570 resistance band where it printed a four-month high near 1.3568. The pair has sold off for four straight sessions, moving from the mid-1.35s to the low-1.34s as the U.S. Dollar Index grinds toward 99.00 ahead of the NFP release. Price is now effectively pinned between immediate resistance at the nine-day EMA around 1.3464 and key support at the 50-day EMA near 1.3380–1.3381. The rejection above 1.3550 and the drift back under 1.3450 confirm that the latest leg is a corrective downswing inside a broader recovery from last year’s lows, not yet a full trend reversal. As long as spot holds above the 1.3380 area, the damage is tactical rather than structural.

US Data, Core PCE Below 3% And Fed Path Behind The USD Bid

The USD strength pressuring GBP/USD is coming from positioning and timing, not from a booming U.S. economy. Consensus for today’s NFP is just 60k jobs versus 64k in November, a clear deceleration in hiring. Initial jobless claims have nudged up to 208k, and continuing claims have risen to 1.914 million, confirming that the labour market is loosening. The ADP report showed only 41k private payroll gains and job openings dropped to 7.146 million, fewer vacancies than in October. At the same time, core PCE inflation, the Fed’s preferred gauge, slipped below 3% in Q4 2025 for the first time in more than two years. That combination – softer jobs plus falling inflation – is exactly what would normally justify rate cuts. Markets know this and already expect the Fed to start easing in 2026, but Fed funds futures still price roughly an 86% probability that the January meeting delivers no change. That gap between weakening data and a central bank that is not cutting yet is what supports the USD into NFP: traders are front-running the event by buying dollars inside a rising channel on the DXY, which trades around 98.9–99.0 with support at 98.85 and the 200-period moving average down at 98.50. RSI on the index sits in the mid-60s, showing solid momentum but not extreme euphoria. This context explains why GBP/USD has been able to fall from 1.3568 to around 1.3430 without any UK-specific shock.

Bank Of England’s Inflation Problem And Why It Still Anchors GBP

On the UK side, the macro story is very different from the U.S. While the Fed is edging toward cuts, the Bank of England is still constrained by stubborn inflation. Price growth spent most of 2025 above 4%, well above target, which is why BoE communication has emphasised that policy is only “near” neutral, not yet loose. Markets therefore cannot credibly price the same pace of easing from Threadneedle Street as from the Fed. That divergence – Fed moving from restrictive toward neutral while the BoE has less space to cut – is structurally supportive for GBP. It limits how far GBP/USD can fall on U.S. data alone and is one key reason dips toward the 1.3400–1.3380 area are still being treated as opportunities to build medium-term long exposure rather than levels to panic-sell. In relative terms, intraday performance tables show GBP losing some ground against the euro but roughly flat versus the U.S. dollar, which fits a narrative of tactical weakness inside a still-constructive bigger picture.

Technical Structure In GBP/USD: 1.3380, 1.3400 And 1.3560 As The Immediate Battlefield

From a pure chart perspective, GBP/USD is at a decision zone. On the daily timeframe, the pair trades below the nine-day EMA (around 1.3450–1.3464) but still above the 50-day EMA (roughly 1.3380–1.3381). The shorter EMA rolling over while staying above the 50-day line shows momentum has cooled but the medium-term uptrend is intact. The 200-day SMA sits just under 1.3380, reinforcing that band as a cluster of strong support. A clean daily close below the 50-day EMA and the 200-day SMA would confirm the break of the main bullish trend line highlighted by multiple analyses and open room toward 1.3350 first and then the more distant eight-month low around 1.3010. On the upside, reclaiming the nine-day EMA near 1.3464 would be the first sign that the corrective phase is tired. Above that, the three-month high at 1.3562 and the recent spike near 1.3568 are immediate resistance. If GBP/USD can close over that zone, the path reopens toward the six-month high at 1.3726 and then 1.3788, the highest level since October 2021. Right now, daily RSI around the low-50s is neutral, confirming consolidation rather than a one-way trend. Shorter-term intraday indicators that had been overbought have already reset, which allows another impulsive move once the NFP shock hits.

Broken Short-Term Trendline, Rising Medium-Term Channel And What It Means For GBP/USD

There is an important distinction between time frames. On the short-term charts, GBP/USD has already broken its main bullish trendline drawn from early December, driven by trading below the EMA50 on intraday setups. That break, combined with overlapping negative signals in the relative strength indicators and the failure to hold above 1.3550, argues for an extended corrective bearish wave in the very near term. This is what is pulling price back towards 1.3400 and why 1.3380 is now so critical. However, on the broader daily structure, the pair still trades along the supportive line of a medium-term uptrend, and the 50-day and 200-day averages are rising. In other words, the market has broken the short-term trend but not the bigger bullish channel yet. As long as spot does not close decisively under 1.3380–1.3350, this remains a pullback inside a bullish regime, not the start of a full-fledged bear trend.

NFP, 60K Consensus And Scenario Map For GBP/USD Around 1.34

The next decisive catalyst for GBP/USD is NFP with a 60k headline consensus. If the report badly misses – for example, a print far below 60k with weaker revisions – the dollar’s current 98.9–99.0 channel could crack, pushing DXY back toward 98.5 and giving GBP/USD fuel for a squeeze higher through 1.3464 and into the 1.3560–1.3570 resistance band. In that scenario, the broken intraday trendline would quickly be negated and dips bought aggressively. A modest miss or a near-consensus number would probably keep the pair locked between 1.3380 and 1.3460, with traders fading both extremes until U.S. CPI and UK data deliver a clearer macro impulse. A strong upside surprise in jobs – a reading well above 60k with firm wage growth – would instead reinforce the dollar’s channel, pushing DXY firmly above 99 and likely forcing GBP/USD through the 1.3380 support band toward 1.3350 initially. In that case, attention would quickly shift to whether buyers defend the 1.3300 handle or capitulate toward the 1.3010 low over the coming weeks.

Tactical Trading View: How To Treat GBP/USD Between 1.3380 And 1.3560

Given the macro divergence and the technical levels, the stance on GBP/USD is nuanced. Short term, the pair is in a corrective downswing, with the break of the short-term trendline and repeated failures at 1.3550–1.3570 justifying a bearish tilt while price sits below the nine-day EMA and under 1.3450. For intraday traders, rallies into 1.3460–1.3500, if they occur before a clear fundamental shift, remain attractive areas to fade with tight stops above 1.3565–1.3570. At the same time, the 1.3400–1.3380 region, where the 50-day EMA, 200-day SMA and prior trend support converge, should not be sold blindly. For swing and medium-term traders, that band still looks like a logical accumulation zone, especially if NFP disappoints or Fed rhetoric leans more dovish as core PCE holds below 3%. Structurally, as long as GBP/USD holds above 1.3380 on a daily closing basis, the broader bias stays mildly bullish and dips are buyable with upside targets back to 1.3560, then 1.3726 and 1.3788. A clean breakdown under 1.3350 that sticks would flip the medium-term view to neutral at best and open a deeper move toward 1.3200–1.3100, with 1.3010 the line in the sand for whether this entire recovery leg from last year’s lows has failed.

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