GBP/USD held steady near 1.3330 during Friday’s Asian session, with traders opting for caution ahead of the delayed US Personal Consumption Expenditures (PCE) Price Index for September. The upcoming release is expected to offer clarity on the US interest rate trajectory and could inject fresh volatility into the pair.
Expectations for a Federal Reserve (Fed) rate cut next week continue to build, pressuring the US dollar (USD) and supporting GBP/USD. The CME FedWatch Tool shows markets pricing in an 89% chance of a 25 bps reduction to the 3.50%–3.75% target range at the December meeting – up sharply from 63% just a month ago.
However, upside momentum for the pound may be limited by concerns over the UK economic outlook and growing expectations of quicker-than-anticipated monetary easing by the Bank of England (BoE). Most analysts anticipate a December rate cut to 3.75%, with market pricing suggesting a 90% probability.
Chart analysis GBP/USD
GBP/USD trades at 1.3328 on the daily chart, holding above the 100-day Exponential Moving Average (EMA) at 1.3300. The flattening of the 100-EMA after a prior decline reinforces a more constructive tone. Price action remains close to the upper Bollinger Band at 1.3348, with widening bands indicating rising volatility and underlying bullish pressure.
The Relative Strength Index (RSI) stands at 61, signalling solid momentum without entering overbought territory.
Initial resistance sits at the upper Bollinger Band at 1.3348; a daily close above this level could unlock additional gains. Immediate support lies at the 100-EMA at 1.3300, followed by the middle band at 1.3189 and the lower band at 1.3029. Maintaining levels above the 100-EMA keeps the bias tilted upward, while a pullback toward the middle band would ease the pair’s upward pressure.
