Pound sterling to US dollar rate prediction: Consolidation near $1.3526 resistance

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Pound Sterling vs Dollar up 0.5% today

Highlights

Weaker-than-expected US inflation data has reduced the likelihood of a near-term Federal Reserve rate hike, weakening the Dollar.
This dovish shift in US monetary policy has bolstered demand for the Pound, improving sentiment in the GBP/USD pair.
GBP/USD shows strong upside momentum, trading near $1.3459, with technicals signaling buyer dominance and a forecast range of $1.3392 to $1.3526.

Sentiment shifts to Pound as softer US inflation tempers rate hike bets

The British Pound's performance against the US Dollar this week has been shaped largely by macroeconomic data releases. US inflation data (CPI) came in lower than expected, signaling weaker price pressures and diminishing the likelihood of an imminent Federal Reserve interest rate hike, according to Fxstreet. This reduction in anticipated US rate tightening has prompted a shift in capital allocation and helped support demand for Pound Sterling in currency markets. The softer economic backdrop for the Dollar continues to provide a favorable environment for GBP/USD, per Fxstreet.

Mixed momentum and overbought signals as buyers hold technical edge

Technical analysis highlights that GBP/USD is trading above the hourly MA-20 ($1.3403), MA-50 ($1.3384), and long-term MA-200 ($1.3441), with the Ichimoku Kijun at $1.3404 acting as immediate support. The Moving Average Convergence Divergence (MACD) displays a buy signal, while the Average Directional Index (ADX) remains neutral, suggesting a weak or non-directional trend. The Relative Strength Index (RSI) sits in buy territory at 67.1, and both the Stochastic RSI and Commodity Channel Index (CCI) indicate overbought conditions. Bull/Bear Power points to buyer dominance intraday, whereas the Awesome Oscillator is neutral, and volatility remains low. Momentum signals are mixed, with strong buying pressure coexisting with some signs of exhaustion among oscillators.

Consolidation risks grow as resistance and support limit range breakout

Over the next two to three trading days, GBP/USD is forecast to trade within the $1.3392 to $1.3526 range, reflecting typical volatility for this pair. The baseline scenario anticipates the pair consolidating inside this band. A bullish break above resistance could target the range high, while a bearish scenario would only gain traction if price slips below immediate support at the $1.3404 Kijun, paving the way toward the lower end of the expected range.

Viktoras Karapetjanc, macro and sentiment strategist at Traders Union, sees the GBP/USD pair buoyed by weaker US inflation and reduced expectations for Fed tightening. He believes supportive macro data and steady UK momentum are providing a solid base for Pound buyers. The analyst expects GBP/USD to consolidate within the current range, with further gains possible if bullish signals strengthen. Karapetjanc remains positive on the pair’s short-term outlook. "Softer US CPI and fading Fed rate hike bets create a favorable setup for GBP/USD to test higher levels in the near term."

Earlier, analysts noted that sterling’s resilience against the dollar was supported by broad expectations of tighter monetary policy and ongoing geopolitical uncertainties driving safe-haven flows. This week’s confirmation of reduced Federal Reserve rate hike risks strengthens the bullish case for GBP/USD, making a decisive move above $1.3526 resistance a potential trigger for renewed upward momentum.

Source of Data: GBP Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.