GBP/USD Price Forecast: Declines below 1.3550, while maintaining bullish bias above 100-day SMA

The immediate bias for GBP/USD is mildly bearish but not decisively trend-reversing. The pair’s move below 1.3550 reflects near-term USD support, driven by the article’s report that hawkish Federal Reserve communication lifted expectations for tighter US policy. That dynamic can pressure sterling through wider expected US–UK rate differentials and higher front-end US yields.

The market signal is mixed rather than outright negative for GBP. GBP/USD remains above the reported 100-day SMA near 1.3445, while RSI is close to neutral, indicating that downside momentum has not yet become sufficiently strong to confirm a broader bearish reversal. A sustained break below the 1.3526 area would increase the risk of a deeper retracement toward the 100-day average and the nearby lower Bollinger Band around 1.3432.

Conversely, recovery above 1.3550 would reduce immediate downside pressure and shift attention toward 1.3668, with a sustained clearance potentially reopening the 1.3700 region. However, the upside case requires either softer US inflation/rate expectations, renewed GBP demand, or confirmation that Bank of England tightening expectations are strengthening faster than markets price Fed tightening.

For correlated markets, the initial implication is supportive for the US dollar broadly and potentially negative for other dollar-sensitive assets if the hawkish Fed repricing persists. Sterling could receive offsetting support from expectations of a Bank of England rate increase and cumulative tightening by year-end, but the UK budget remains a medium-term uncertainty: a fiscally credible outcome could support GBP and UK assets, while concerns over fiscal expansion, borrowing needs, or growth could undermine sterling.

Traders should monitor US inflation data and Treasury yields, the Bank of England’s September 16, 2026 policy decision, UK fiscal signals ahead of the October 28, 2026 budget, and whether GBP/USD can hold the 100-day SMA. The key risk to the initial bearish interpretation is a dovish repricing of the Fed or stronger-than-expected UK data; the main risk to the bullish technical structure is a daily close below the 100-day SMA zone.