GBP/USD Price Forecast: Bullish pressure builds as pair tests resistance at 1.3400

Resistance around 1.3400 comes under pressure as GBP/USD advances for a second successive day.
Following the UK CPI release, the BoE faces greater pressure to raise interest rates in November.
A move through 1.3400 would put former support near 1.3480 in view as the next upside objective.

Strong consumer inflation figures provided support for the British Pound (GBP) on Wednesday, although increased public borrowing offset their positive impact. After briefly wavering in early European trading, Sterling resumed its advance against the US Dollar (USD). With GBP/USD having climbed nearly 2% from last week’s lows, buyers are now testing resistance around 1.3400.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

September inflation exceeded expectations as higher energy prices drove an acceleration in price growth, according to UK Consumer Price Index (CPI) data published earlier in the day. The release has reinforced expectations that the Bank of England will finally raise interest rates at its 4 November meeting.

Sterling initially struggled to gain traction after the release. Published simultaneously, the UK’s Public Sector Net Borrowing figures showed that government debt rose in September at its fastest pace in more than five years, largely because of debt interest. With Chancellor John Healey preparing the budget for release next week, the borrowing data may have revived longstanding concerns over the UK’s public finances.

Technical Analysis: GBP/USD Eyes 1.3480 on a Break Above 1.3400

Having confirmed a break above the preceding two weeks’ horizontal range earlier this week, GBP/USD retains a positive bullish bias at 1.3389. On the 4-hour chart, the Relative Strength Index (14) stands at 69.14, just short of overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram is slightly positive. Together, these indicators point to firm upward momentum, albeit one that is becoming increasingly stretched in the short term.

If 1.3400 gives way, buyers will target the lows of 13 August and 3 September around 1.3470. This area also marks the 61.8% Fibonacci retracement of the August-October decline. Beyond that, the next level would be the 9 September high near 1.3670.

Around 1.3300, the lows recorded on Monday and Tuesday coincide with the upper boundary of the previous two weeks’ channel, providing immediate support. A decisive break below this level would restore bearish control and turn attention back to the year-to-date lows near 1.3140.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Pound Sterling Records Its Strongest Weekly Gain Against the US Dollar

This week’s percentage moves in the British Pound (GBP) against the major currencies listed are set out below. Sterling’s strongest performance was against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.42%	-0.67%	-0.06%	-0.51%	-1.09%	-0.62%	-0.23%
EUR	0.42%		-0.21%	0.37%	-0.05%	-0.58%	-0.17%	0.22%
GBP	0.67%	0.21%		0.59%	0.17%	-0.35%	0.05%	0.50%
JPY	0.06%	-0.37%	-0.59%		-0.43%	-1.01%	-0.55%	-0.04%
CAD	0.51%	0.05%	-0.17%	0.43%		-0.58%	-0.07%	0.33%
AUD	1.09%	0.58%	0.35%	1.01%	0.58%		0.40%	0.82%
NZD	0.62%	0.17%	-0.05%	0.55%	0.07%	-0.40%		0.44%
CHF	0.23%	-0.22%	-0.50%	0.04%	-0.33%	-0.82%	-0.44%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the British Pound on the left and following its row across to the US Dollar, for instance, gives the percentage change for GBP (base)/USD (quote) in the corresponding cell.