– Written by


David Woodsmith

STORY LINK GBP/USD Price Forecast: Pound Sterling Flat despite Weak UK Growth

The Pound US Dollar exchange rate (GBP/USD) was mostly rangebound on Thursday, in the wake of the UK’s latest GDP release.

At the time of writing, GBP/USD was trading at approximately $1.3425, virtually unchanged from the start of Thursday’s session.

The Pound (GBP) held its ground against most of its major peers on Thursday, following the release of the UK’s latest GDP figures.

The data came in as expected, showing that the economy grew by a marginal 0.1% in August, while July’s figure was revised down to -0.1%.

Although the results underscored the UK’s fragile economic backdrop, they were broadly in line with forecasts and therefore failed to trigger any significant market reaction.

Despite the subdued data, Sterling managed to remain resilient through Thursday’s session, with GBP exchange rates holding steady against most counterparts.

The US Dollar (USD) struggled to gain traction against most of its major peers on Thursday, as markets awaited a series of speeches from Federal Reserve officials.

Following Fed Chair Jerome Powell’s address on Tuesday evening, in which he hinted that further interest rate cuts could still be possible this year, investors were cautious, with any additional dovish signals likely undermining the ‘Greenback’.

Adding to the pressure, a mildly upbeat market mood limited demand for USD, given its role as a safe-haven currency.

As a result, the US Dollar found it difficult to make significant gains during the first half of Thursday’s European trading session.

GBP/USD Forecast: Central Bank Commentary to Steer Direction

Looking ahead to Friday’s European session, the GBP/USD exchange rate is likely to be influenced primarily by speeches from both Federal Reserve and Bank of England (BoE) officials, as economic calendars for the UK and US remain quiet.

For the US Dollar, any dovish signals from Fed policymakers could pressure the ‘Greenback’, particularly if the remarks fuel further expectations of interest rate cuts later this year.

Such commentary may see USD exchange rates retreat heading into the weekend.

Meanwhile, Sterling will be sensitive to comments from BoE Chief Economist Huw Pill.

Should Pill signal concerns about the UK economy or hint at a more cautious monetary outlook, GBP exchange rates could struggle to gain traction, leaving the Pound vulnerable as the week concludes.

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TAGS: Pound Dollar Forecasts

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: GBP Rebounds as Fed Dovish Shift Hurts USD

The Pound to Dollar (GBP/USD) exchange rate rebounded from 10-week lows near 1.3250 after dovish Federal Reserve rhetoric pushed the dollar lower.

ING maintains a 12-month target of 1.36, although analysts warn that lingering UK rate-cut risks may cap Sterling upside.

GBP/USD Forecasts: Bounces from 10-Week Lows

The Pound Sterling-US Dollar rate dipped sharply to 10-week lows close to 1.3250 on Tuesday before a recovery to 1.3360 on Wednesday.

The dollar lost ground on relatively dovish rhetoric by Chair Powell and unease surrounding US-China trade wars. The Fed Beige Book will be watched closely later Wednesday.

According to UoB; “The rebound from oversold conditions suggests that instead of continuing to decline, GBP is more likely to trade in a range today, expected to be between 1.3290 and 1.3365.”

Scotiabank commented; “Recent support was clearly observed in the mid-1.32s, and resistance appears limited ahead of 1.34 and the 50-day MA at 1.3476.”

ING expects little headway and has a 12-month GBP/USD target of 1.36.

The outlook for interest rates remains a key element.

In comments on Tuesday, Fed Chair Powell noted that the US jobs market showed “pretty significant downside risks.”

Following the rhetoric, markets were even more confident that the Fed would cut rates at the October meeting.

Scotiabank remains very cautious over dollar fundamentals; “The prospect of easier Fed policy through 2026 constitutes a clear constraint on the USD outlook in broad terms, as does the rising level of Federal government debt. Many large economies are dealing with elevated levels of government debt but few have as weak a profile for the long-term debt trend as the US.”

As far as US data is concerned, the New York empire manufacturing index strengthened to 10.7 for October from –8.7 previously and well above expectations of –2.

UK fiscal and monetary policy will be important elements for the Pound

ING commented; “The UK economy has not been performing as badly as the local press would have us believe, but monetary and fiscal risks do stalk sterling.

After this week’s data, the Pound is still being hampered by increased speculation that the Bank of England will have greater scope to lower interest rates.

According to Scotiabank the Pound is vulnerable; “Fundamentals have deteriorated with a notable pullback in UK-US spreads, narrowing from their recent two year highs in a pullback that warrants attention. The outlook for relative central bank policy is shifting and rates markets are pricing in renewed dovishness at the BoE following Tuesday’s labor market disappointment.”

In comments on Wednesday, there was a clear signal from Chancellor Reeves that taxes would be increased in the November budget.

Saxo Markets UK investor strategist Neil Wilson expects market jitters “I’m not sure how many sellers are left in the short USD trade but I would tend to favour a pre-Budget retreat to the 1.30 support before we maybe see some fiscal tightening that is more than the market is expecting.”

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Created on October 16, 2025

• The US dollar has fallen pretty significantly during the trading session on Wednesday against the Japanese yen, but we are still extraordinarily elevated.
• With that being the case, I’m still looking for a little bit of a bounce that I can take advantage of, and we are starting to get it late in the session.
• The question is, will it be enough to really start buying into? I don’t know.

I think maybe we have a little further to go. I will let the market just tell me what it’s going to do. But right now, I know that I don’t want to get short of this pair. The 150 yen level would be interesting. The 149 yen level would be even more interesting. If we just bounce from here, then we may find ourselves consolidating a bit between the 151 yen level and the 153 yen level, trying to get our footing on this breakout.

Major Rectangle Below, and Possible Triangle

We previously had a major rectangle that we gapped out of whether or not we fill that gap remains to be seen. Typically, you do. So that is something that you want to pay attention to. But I also recognize that you can make an argument that we just broke out of a triangle and that could signify a massive move in this pair. In fact, you could be looking at somewhere in the neighborhood of a move to about 162 yen. That would be basically back where we fell in July of 2024. So, we’ll just have to wait and see.

Regardless, I do think that this is a buy on the dip market, and I do recognize that you get paid to sit at the end of the day with the swap interest rate differential. And at this point, I’m just looking for a nice entry, and I will get long again.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Created on October 16, 2025

EUR/USD Analysis Summary Today

• General Trend: Bearish.
• Today’s Support Points for EUR/USD: 1.1600 – 1.1560 – 1.1480.
• Today’s Resistance Points for EUR/USD: 1.1680 – 1.1730 – 1.1800.

EUR/USD Trading Signals:

• Buy EURUSD from the support level of 1.1550, target 1.1780, and stop 1.1470.
• Sell EURUSD from the resistance level of 1.1760, target 1.1500, and stop 1.1820.

Technical Analysis of EUR/USD Today:

Based on recent trading, the EUR/USD pair has formed a double bottom pattern on the short-term chart, suggesting the possibility of a reversal from the previous bearish trend. Across trading company platforms, the Euro/Dollar pair appears to be testing the neckline resistance at the key psychological level of 1.1600, and a breakout of this area could confirm a shift in direction. If the neckline is successfully broken, the EUR/USD pair could rise by the same height as the double bottom formation. However, the price may encounter resistance from the nearby descending trend line and the dynamic pivot point of the 100 Simple Moving Average (SMA), which could trigger a pullback before the upward trend gains momentum.

At the same time, the indicated area of interest on the chart shows where sellers could take a stand, but continued buying pressure outside this area suggests buyers are ready to take control. A strong break above the descending trend line and the moving averages could pave the way for a move towards higher levels. Regarding moving averages, the 100-day SMA remains below the 200-day SMA, indicating that the path of least resistance is still bearish, or that downward momentum may continue. However, the gap between the indicators appears to be narrowing, suggesting a potential bullish crossover is on the horizon. Furthermore, this confirms increasing buyer interest.

The Stochastic indicator for EUR/USD performance is hovering near the overbought zone, reflecting strong upward momentum at the moment. A decline of the oscillator from this area could signal buyer exhaustion, potentially leading to a rebound. On the other hand, if the Stochastic remains high, it would indicate that buyers are still in control. The Relative Strength Index (RSI) is also trending higher, so the price may continue to follow the same approach with buyers having the upper hand. However, the oscillator has limited room to climb before reaching the overbought zone, meaning that the upward momentum may start to fade soon.

Trading Tips:

Keep in mind that the rebound in the Euro/Dollar price still lacks strong momentum to confirm its occurrence, and the 1.1800 resistance will remain the most crucial to confirm an upward shift. Therefore, carefully monitor the factors influencing the currency exchange rate.

Dollar Retreats After Federal Reserve Signals

According to Forex currency market trading, the U.S. dollar fell after the Federal Reserve’s “Beige Book” report boosted expectations for further U.S. interest rate cuts. The report showed slowing economic growth, persistently weak labor market conditions, and rising prices for input costs. Indicators of tariff implementation varied, with some companies keeping selling prices unchanged, while others reported an increase in import costs.

According to expert views on the report, the “Beige Book” generally reinforces the view that the economic outlook has not changed much since the Fed’s September meeting. They suggest that this keeps the Fed on track to cut U.S. interest rates by 25 basis points later this month, and likely again in December.

According to reliable trading company platforms, the U.S. Dollar Index (DXY) fell by 0.2% to 98.596 after recording a one-week low of 98.417 on Wednesday.

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