GBP/USD Price Forecast - Pound Steadies At 1.3160 As Traders Brace For UK CPI And U.S. NFP

GBP/USD Hovers Around 1.3160 As Sterling Faces Pressure From Inflation Data And U.S. Dollar Strength

GBP/USD is trading near 1.3160, showing restrained movement after volatile sessions driven by diverging monetary expectations between the Bank of England (BoE) and the Federal Reserve (Fed). The pair briefly touched 1.3185, a resistance aligning with its 20-day Simple Moving Average, before retreating on renewed U.S. Dollar demand ahead of crucial Nonfarm Payrolls (NFP) data and UK Consumer Price Index (CPI) figures.

The Pound remains constrained by rising speculation that the BoE could deliver a rate cut as early as December, with money markets pricing an 83% probability of easing. Meanwhile, Fed cut odds for December have edged up to 55%, a shift from below 50% last week, after weaker jobless data showed 232K initial claims and 1.957 million continuing claims, suggesting a cooling but resilient U.S. labor market.

Sterling Struggles As Markets Eye UK Inflation And Autumn Budget

The Pound Sterling (GBP) remains subdued as traders brace for the release of UK October CPI. Expectations center on a further slowdown from September’s 2.8% headline rate, with energy base effects and housing costs contributing to disinflation. A weaker CPI print could cement market conviction of a BoE rate cut, pressuring GBP/USD toward 1.3080.

Chancellor Rachel Reeves’ Autumn Budget, scheduled for November 26, adds fiscal uncertainty. Analysts estimate Reeves may seek to raise £30–£40 billion through fiscal adjustments to bridge widening deficits. Speculation over potential corporate tax reforms and spending cuts has kept UK gilt yields volatile, undermining Sterling’s near-term appeal.

Dollar Index (DXY) Stability Caps GBP/USD Upside

The U.S. Dollar Index (DXY) trades around 99.46, supported by cautious risk sentiment ahead of NFP and Fed minutes. Market participants expect the U.S. economy to add roughly 50,000 jobs in November, with unemployment steady at 4.3%. Stronger readings could reinforce the Greenback, pushing GBP/USD back toward the 1.3090–1.3110 range.

Fed officials maintain a mixed tone: Governor Christopher Waller hinted that slower hiring could justify a December rate cut, while Vice Chair Michael Barr cautioned against premature easing given resilient consumer demand. This policy ambiguity continues to anchor DXY near the 100.00 handle, keeping Sterling capped under resistance zones.

Technical Landscape: Cable Faces Range Compression Between 1.3130 and 1.3210

On the daily chart, GBP/USD consolidates beneath the 20-day SMA (1.3185), forming consecutive doji candles that reflect market indecision. The short-term structure shows compressed moving averages — the 20, 50, 100, and 200 SMAs — all clustering within 1.3141–1.3158, signaling equilibrium before a directional breakout.

A sustained move above 1.3185 would clear the path toward 1.3210, followed by 1.3247 and 1.3290, with the next resistance aligning with the 100-day SMA. Conversely, failure to hold above 1.3130 could expose downside targets at 1.3080 and 1.3045, where traders anticipate fresh dip-buying interest. RSI hovers near 50, confirming balanced sentiment, while MACD remains neutral.

BoE’s Dovish Tilt Meets Market Skepticism

BoE Chief Economist Huw Pill noted that inflation has “not slowed as much as expected,” urging caution in interpreting recent data. Still, the broader market sees his remarks as tactical — setting the stage for a controlled rate reduction amid easing wage pressure. Swati Dhingra, among the most dovish MPC members, reiterated that “tight policy is doing its job,” hinting at support for cuts as early as the next meeting.

Money markets now price a 25 basis-point cut in December, followed by two additional reductions in 2026. This trajectory contrasts sharply with Fed projections, where the first cut isn’t fully priced until Q1 2026, widening yield differentials that favor the USD and limit Sterling’s recovery potential.

Macro Environment: Global Growth Risks And Safe-Haven Flows Bolster USD

Weak Q3 GDP figures from Japan (-0.3%) and Switzerland (+0.1%) deepened global slowdown fears, reinforcing safe-haven flows into the U.S. Dollar. The S&P 500 fell below its 50-day average (6,707) for the first time since May, prompting broad risk aversion that typically weighs on risk-linked currencies like the Pound.

At the same time, traders remain cautious ahead of NVIDIA’s Q3 earnings, which could influence sentiment across tech-heavy indices. A disappointing print would likely trigger further equity downside, benefiting the Greenback and reinforcing downward pressure on GBP/USD.

Market Liquidity And Positioning: Short Bias Dominates But Momentum Flatlines

CFTC data show leveraged funds maintaining a net short position of 22,400 contracts on Sterling, a marginal increase from last week. However, positioning lacks conviction — the ratio of short-to-long positions stands near 1.18:1, far below extremes seen during the August selloff. This reflects uncertainty rather than outright bearish conviction.

Volatility remains subdued, with one-month implied volatility near 7.6%, down from 9.2% in October. The options skew leans toward downside protection, indicating traders prefer hedging risk around 1.3100–1.3050.

Technical Confluence And Short-Term Outlook

The 50-hour EMA (1.3150) serves as intraday support, while Supertrend resistance near 1.3195 forms the immediate ceiling. A confirmed breakout above this band could spark short-covering toward 1.3245, but failure would likely reinforce the current sideways structure.

Momentum traders highlight 1.3080 as a critical inflection point — a breakdown below that zone would expose 1.3040 and potentially 1.2985, coinciding with the August low. Conversely, if GBP/USD holds above 1.3160 post-CPI, the pair could re-test 1.33, contingent on weaker U.S. payroll data or dovish Fed remarks.

TradingNews Verdict: GBP/USD – Hold Bias With Short-Term Bearish Tilt Toward 1.3080

With GBP/USD anchored around 1.3160, the market is caught between Fed data-driven volatility and BoE dovish repricing. While structural conditions favor the U.S. Dollar, the pair’s failure to break below 1.3130 suggests residual support from oversold Sterling positioning.

Until the UK CPI and NFP results deliver clarity, momentum is likely capped below 1.3210, with near-term bias leaning bearish toward 1.3080.
If inflation undershoots and Fed rhetoric remains hawkish, a slide to 1.3045 is plausible. Conversely, a weak U.S. jobs print or dovish Fed minutes could trigger a countertrend rally above 1.3245.

The TradingNews outlook for GBP/USD remains Hold, with a bearish bias in the short term and neutral tone into year-end as policy divergence narrows and volatility returns to the 2024 range between 1.2980–1.3350.

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