1.3420: GBP/USD Price Forecast hinges on a decisive break above this level for a fresh rally leg

1.3373 is the level around which GBP/USD trades flat. A modest US Dollar recovery erases the pair’s earlier gains.
Wednesday’s Fed decision is expected to keep interest rates unchanged.
Monetary tightening by the BoE next week remains investors’ expectation.

1.3373 is the level around which the British Pound (GBP) trades flat against the US Dollar (USD). During Monday’s European session, GBP/USD has relinquished its earlier advance as the US Dollar recoups part of its initial losses.

Near 101.70 at the time of writing, the US Dollar Index (DXY) remains slightly lower. The index measures the Greenback against six major currencies.

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

Wednesday’s monetary policy announcement from the Federal Reserve (Fed) is a key focus for investors this week. According to the CME FedWatch tool, a decision to hold interest rates within the 3.75%-4.00% range is almost certain. The same tool indicates that the United States (US) central bank will increase rates at its December meeting.

Thursday also brings the preliminary Q3 Gross Domestic Product (GDP) release and September’s Personal Consumption Expenditure (PCE) Price Index data, giving investors further points of focus beyond Fed policy. Expectations put annualised US economic growth at 3.2%, up from the previous reading of 2.2%.

For GBP, next week’s Bank of England (BoE) monetary policy decision will be the main catalyst. A 25 basis point (bps) interest rate increase to 4% is widely anticipated.

1.3323 Support: GBP/USD Technical Outlook

At 1.3370 on the daily chart, GBP/USD remains above its 20-day exponential moving average (EMA) of 1.3323. Buyers’ defence of the recent recovery points to a mildly positive near-term outlook. A Relative Strength Index (RSI) reading of 54.8 places momentum in neutral-to-positive territory, providing support without signalling overbought conditions.

The 20-day EMA near 1.3323 provides the first downside support. A breach would likely weaken the bullish bias and leave the pair vulnerable to deeper declines. On the upside, the previous week’s high near 1.3420 is the first barrier. A decisive move above it would clear the way for further gains towards 1.3500.

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

Economic Data Watch

Fed Interest Rate Decision: Policy Outlook

At eight scheduled meetings each year, the Federal Reserve (Fed) reviews monetary policy and decides on interest rates. Its dual mandate is to maintain inflation at 2% and sustain full employment. Interest rates are its primary policy instrument, covering both lending to banks and lending between banks. Higher rates tend to draw in more foreign capital, strengthening the US Dollar (USD). Rate cuts, by contrast, tend to weaken the USD as capital shifts to countries offering higher returns. When rates remain on hold, the focus moves to the Federal Open Market Committee (FOMC) statement. Markets assess whether its tone is hawkish, signalling expectations of higher future interest rates, or dovish, signalling expectations of lower future rates.

View further details.

Upcoming release: Wed 28 Oct 2026 18:00

Release schedule: Irregular

Market consensus: 4%

Prior reading: 4%

Data source: Federal Reserve