• The GBP/USD forecast remains feeble after downbeat UK employment data.
• The US dollar remains firm amid easing US-China trade worries.
• All eyes are now on key central bank speeches that could provide clues on the easing cycle.

The GBP/USD price weakened on Tuesday, falling below the 1.3300 mark amid softer-than-expected UK labor market data. It reinforced the odds of additional rate cuts by the Bank of England.

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According to the Office for National Statistics, the UK ILO unemployment rate surged to 4.8%, up from the previous 4.7%, slightly above the market forecast. The employment grew by 91k, well below the previous 232k reading, suggesting a slowdown in hiring momentum. The jobless claims soared to 25k, well above the 10k forecast. Wage growth also signaled weakness as average earnings, including bonuses, slowed to 4.7%. However, excluding bonuses, the average earnings briefly rose to 5%, above the BoE’s comfort zone.

The data reinforced the perception that the UK economy is weakening, prompting investors to bet on the probability of further easing. The markets now anticipate a 70% chance of a 25 bps rate cut before year-end, as policymakers would aim to support household consumption amid rising labor market weakness.

BoE’s MPC member, Megan Greene, noted, “Monetary policy remains restrictive, but further rate cuts could be warranted if inflation continues to drift lower to 2% target.” However, she warned against aggressive rate cuts, given uncertainty around persisting inflation and wage dynamics.

On the other hand, the US dollar index found a firm footing near mid-99.00, supported by easing US-China trade tension and rising expectations that the Fed would proceed with rate cuts more cautiously.

GBP/USD Key Events Ahead

Investors are looking forward to two major speeches:

• Fed Chair Jerome Powell’s commentary
• BoE Chair Andrew Bailey’s speech

Both events remain the key to determining the future policy path and probable divergence to forecast the next leg for the pair.

GBP/USD Technical Forecast: 1.3200 at Sight

After breaking the demand zone and recent swing low at 1.3260, the GBP/USD price is looking to test the 1.3200, which is a psychological support. The key MAs on the 4-hour chart reveal a strong bearish trend, while the RSI has plunged below 40.0, showing further room for losses.

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The key support for the pair emerges at 1.3200 ahead of 1.3125 and then 1.3000. On the upside, the immediate resistance lies at 1.3300, which can be tested if the price bounces and closes the candle above the swing low of 1.3260. The next resistance appears at 1.3335 ahead of 1.3360.

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The EURJPY pair resumed the bearish corrective attack in Friday’s trading, hitting some of the previously suggested targets, to form quick positive rebound to settle near 176.50, keeping the main bullish scenario that depends on the stability within the bullish channel’s levels that appears in the above image.

Note that the continuation of the contradiction between the main indicators that might force the price to provide more of the sideways trading, to keep waiting for breaching 177.05 to confirm its readiness to form new bullish attack by targeting the top at 177.80.

The expected trading range for today is between 175.90 and 177.05

Trend forecast: Fluctuated within the bullish trend

– Written by


Tim Boyer

STORY LINK Pound to Euro Week Ahead Forecast: Split Between 1.11 and 1.2050 Outlook

The Pound to Euro (GBP/EUR) exchange rate spent another week trapped below 1.15 as UK fiscal concerns offset Euro weakness tied to France’s deepening political impasse.

Foreign exchange strategists warn that, with Prime Minister Lecornu reappointed and budget gridlock unresolved, both currencies are likely to face lingering downside pressure.

GBP/EUR Forecasts: Groundhog Day for France

SocGen forecasts that the Pound to Euro (GBP/EUR) exchange rate will weaken to 1.11 by the third quarter of 2026 on Pound vulnerability.

Credit Agricole, however, is backing gains to 1.2050 by the end of next year as the French situation contributes to Euro losses.

GBP/EUR briefly hit 3-week highs around 1.1550 during the week on Euro concerns before a dip back below 1.15 amid a lack of confidence in underlying UK fundamentals with the Pound unable to benefit from a record high for the FTSE 100 index.

French Prime Minister Lecornu resigned on Monday, but after a week of intense political intrigue, President Macron renominated him on Friday.

There is no evidence that Lecornu can fare better this time around and faces major difficulties in passing the budget with the on-going risk that deadlock will eventually lead to fresh elections.

SocGen does note the potential for short-term Euro weakness; “The French political situation is clearly another source of concern, with policy paralysis potentially dampening growth expectations. The bond market has to digest supply, and higher French yields create headlines. Even if yield differentials are far below those we saw for peripheral bonds in 2010-2015, this all weighs on the euro.”

Credit Agricole also notes near-term Euro vulnerability; “The economic outlook of the Eurozone’s largest economy has been attracting considerable attention. In all, we think that economic uncertainty and lingering political risks in France could keep the EUR on the defensive in the very near term.”

SocGen expects weak UK growth and that Bank of England will eventually relent; “The stickiness of inflation relative to the euro zone and the US is limiting the room for manoeuvre by the BoE so decreasing the level of policy restriction to boost growth must wait. SG economics postponed the next rate cut from November to February but maintain the terminal forecast of 3.0%.”

JP Morgan noted cracks in the UK economic outlook; “With last week’s UK PMI suggesting political uncertainty is starting to creep back into the UK data, this emphasizes the negative growth-fiscal feedback loop where weaker UK growth worsens the fiscal hole which holds long-end gilt yields higher than they otherwise would be and that triggers the stagflationary reaction function in the currency.”

HSBC expects further fiscal fears; “In the UK, it seems more like mission impossible – particularly for fiscal policy. We estimate the UK Chancellor may need to find around GBP30bn of additional consolidation at the 26 November Budget – a big ‘black hole’ to fill.”

It added; “Tax rises and spending cuts will not go down well with voters and her own party. But a non-credible plan – such as assuming unrealistic tax rises and spending cuts in four or five years’ time – or even a small tweak to the fiscal targets to allow more borrowing, could alarm the bond market.”

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