GBP/USD Price Forecast - Pound to Dollar Slides to 1.3322 as U.S. Growth Outpaces U.K. Outlook and BoE Caution Adds Pressure

GBP/USD Slides to Seven-Week Low as U.S. Data Outpaces U.K. Recovery

The GBP/USD pair has come under sustained selling pressure, dropping to 1.3322 this week, its weakest point in nearly two months, before stabilizing just above 1.3350. The move reflects a sharp 3% decline from the September high at 1.3725 as U.S. economic strength has undercut the case for aggressive Federal Reserve rate cuts, while the Bank of England remains caught between sticky inflation and weakening domestic growth.

Impact of U.S. Growth and Inflation Data on GBP/USD

The second-quarter U.S. GDP revision to 3.8% year-on-year, coupled with weekly jobless claims falling to 218,000 and durable goods orders surging 2.9%, has provided the dollar with renewed momentum. These numbers highlight U.S. economic resilience and have reduced expectations for back-to-back Fed cuts in 2025. Meanwhile, markets await the Core PCE inflation print at 2.9% year-on-year, a figure that could cement the Fed’s cautious stance and extend downside pressure on GBP/USD if it overshoots consensus.

Bank of England Uncertainty Weighs on Sterling

Governor Andrew Bailey has acknowledged that U.K. inflation is on a downward path but linked future easing directly to progress in consumer prices. This hesitancy is complicated by other MPC members, such as Megan Greene, warning against premature cuts amid lingering upside risks. Political noise in London—calls for re-nationalization of utilities and large-scale borrowing schemes—has rattled gilt markets already strained by fragile demand. With households sitting on unusually high savings and labor conditions softening, the pound has struggled to find a solid base against the dollar.

Technical Breakdown of GBP/USD Levels

Technically, GBP/USD’s inability to reclaim 1.3390, the 23.6% Fibonacci retracement of the January–July rally, leaves bears in control. A sustained break under 1.3330 risks a slide toward 1.3255, followed by deeper targets at 1.3145 and the 200-day SMA near 1.3130. On the flip side, only a decisive recovery above 1.3470–1.3500, where the 20- and 50-day SMAs converge, would ease bearish momentum and allow a rebound toward 1.3600. Until then, the bias remains skewed to the downside with 1.3300–1.3260 acting as the next key pivot zone.

Short-Term Pound Sterling Outlook Against the Dollar

The stochastic oscillator sitting below 20 suggests the pair is oversold, and price action beneath the lower Bollinger band signals the potential for a short-lived bounce. However, with market structure deteriorating since August’s 1.3139 low and with GBP/USD still capped under the broader 1.3675–1.3720 resistance band, upside moves should be treated as corrective rallies rather than a trend reversal. A failure to sustain above 1.3400 in the coming sessions would quickly put 1.3260 back on the radar.

Final Assessment: Bearish Bias Maintained on GBP/USD

Considering the stronger U.S. macro backdrop, upcoming PCE inflation data, and the Bank of England’s indecisive tone, GBP/USD remains in a bearish setup with high probability of retesting 1.3255–1.3150 in the short term. The pair is oversold enough for tactical rebounds, but with momentum firmly on the dollar’s side, rallies are likely to be capped. Based on current dynamics, the stance remains Sell on GBP/USD, with downside risks dominating until there is evidence of U.S. data softening or the BoE signaling a firmer stance against inflation.