British Pound stays under pressure against USD as Wednesday’s UK Autumn Budget and FOMC approach

• Ahead of major event risks, GBP/USD makes modest gains on Tuesday but shows little bullish conviction.
• Wednesday brings the UK Autumn Budget, followed by the closely watched FOMC decision.
• Fresh direction for the pair will also come from US Q3 GDP figures and the PCE Price Index.

With this week's major events approaching, traders appear reluctant to take aggressive positions, seemingly limiting the scope for further GBP/USD losses. The pair continues to trade under pressure below the mid-1.3300s in Tuesday's Asian session, although it remains above the previous day's swing low.

Bond market stability is expected to be a priority when UK Chancellor John Healey presents his first Autumn Budget on Wednesday, following Prime Minister Andy Burnham's substantial spending plans. Investors will examine the proposed public expenditure and additional funding plans closely, looking at how these will be financed without provoking an adverse reaction in the gilt market. The outcome will be an important driver of the British Pound (GBP), giving GBP/USD fresh direction.

Wednesday's decision from the US Federal Reserve (Fed) will also draw investors' attention, as expectations increasingly favour unchanged interest rates. With no updated economic forecasts due, markets will look to the accompanying policy statement and Fed Chair Kevin Warsh's remarks at the post-meeting press conference for further indications of the policy outlook. Those signals will help shape moves in the US Dollar (USD) and GBP/USD.

Thursday's US releases will provide another focus this week, with the Advance Q3 GDP growth report and the Personal Consumption Expenditures (PCE) Price Index both due. Until then, expectations of another increase in US borrowing costs in December, together with geopolitical uncertainty, continue to support the USD. The prospect of tighter Bank of England (BoE) monetary policy should, however, constrain losses in GBP/USD.

GBP/USD remains below resistance on the daily chart

Technical Outlook Shows GBP/USD Facing Overhead Resistance

Trading just below the 38.2% retracement at 1.3344, GBP/USD continues to face a ceiling at the 100-day Simple Moving Average (SMA) of 1.3389, alongside a cluster of overhead Fibonacci levels. This leaves rallies vulnerable as the wider recovery from the 1.3141 cycle low struggles to overcome medium-term resistance.

Beyond the 100-day SMA, the next significant obstacle lies around the 50.0% retracement at 1.3407. Further resistance stands at 1.3470 (61.8%) and 1.3559 (78.6%), before the 1.3673 swing high. Initial support, meanwhile, lies at the 23.6% retracement at 1.3267. A more substantial structural floor sits at the 1.3141 cycle low, where a sharper retreat would be expected to attract stronger buying interest.

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