British Pound holds on to 1.3300 amid UK budget focus before Fed’s decision

• GBP/USD remains close to 1.3300 as losses extend into a fourth day.
• The UK Chancellor commits to clearing the current budget deficit within three years.
• Markets put the chance of a December Fed rate rise at 85%, with Warsh's guidance in focus.

A 0.02% decline leaves the Pound Sterling lower against the US Dollar for a fourth successive day, with GBP/USD little changed near 1.3300. Investors are assessing the UK’s Autumn Budget while preparing for the Federal Reserve’s policy announcement.

GBP/USD remains under pressure ahead of Fed decision despite UK fiscal discipline commitments

Presenting the budget, UK finance minister John Healey described it as “built on fiscal discipline which matches immediate action today, with clear direction for the future.” According to Healey, the Office for Budget Responsibility (OBR) said the Middle East war makes forecasting more difficult. He added that the budget “puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within 3 years.”

With tensions in the Middle East intensifying, GBP/USD stayed under pressure and showed little response to the announcement.

Attention in the US centres on the Federal Reserve’s monetary policy announcement. Although money markets assign a nearly 91% probability to Warsh and his colleagues leaving rates unchanged, investors will scrutinise his press conference for guidance on the foreseeable future.

According to Prime Terminal, swaps pricing implied 21 basis points of tightening towards the end of the year, equivalent to an 85% probability of a Fed rate increase at the December meeting.

Beyond the Fed announcement, US Gross Domestic Product (GDP) data for Q3 and the central bank’s preferred inflation measure, Core PCE, could help determine GBP/USD’s direction as month-end approaches.

GBP/USD Price Forecast: Technical signals retain a bearish bias

Trading at 1.3303 on the daily chart, GBP/USD remains beneath a tight grouping of simple moving averages near 1.3390, keeping the short-term outlook bearish. Having fallen below its rising trend structure, the pair recently tested the former support line around 1.3360, which now serves as resistance. By contrast, a descending trend line that previously limited gains around 1.3255 now offers nearby support. At about 48, the Relative Strength Index (14) lies marginally below its neutral midpoint, suggesting bullish momentum is fading. Unless buyers recover the technical barriers above, the pair remains vulnerable to further losses.

The broken rising trend line near 1.3360 presents the first upside hurdle. Beyond it, the 50-, 100- and 200-day simple moving averages converge around 1.3390, forming a key resistance area; a daily close above this zone would reduce the immediate downward pressure. Higher resistance comes from a descending trend line around 1.3544, followed by an older rising trend line near 1.3606. Initial support, meanwhile, lies at the descending trend line around 1.3255 that has switched roles. A breach would leave scope for a sharper retreat towards earlier lows that are not displayed by the current set of indicators.

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