• Core PCE rises to 3.4%, keeping Fed pressure alive.
• GDP and jobless claims beat forecasts, but Dollar slips.
• UK political uncertainty lingers as Burnham succession questions grow.

The Pound Sterling advances by 0.22% even though the US economy grew faster than previously reported in Q1 of 2026, while inflation readings suggest that the Federal Reserve needs to tighten policy. The GBP/USD trades at 1.3194, after bouncing off daily lows of 1.31511.

GBP/USD gains as Dollar profit-taking offsets strong US data

The US Dollar treads water even though the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, expanded by 3.4% YoY as expected, up from 3.3% in April, implying that further tightening is needed. The US Dollar Index (DXY), which tracks the buck’s value against six currencies, is down 0.17% at 101.41.

US Treasury yields are also down, with the 10-year T-note yield down 2 basis points to 4.378%. US Gross Domestic Product (GDP) figures for Q1 2026 rose by 2.1% QoQ, exceeding estimates and the previous 1.6% print. Initial Jobless claims for the week ending June 20 dipped from 226K to 215K below estimates, while Durable Goods Orders contracted -4.5% as expected, down from 8% gain in the previous month.

Given the backdrop, the Greenback was expected to extend its rally, but traders seem to be booking profits as money markets trimmed Fed hawkish bets for 2026.

Prime Terminal data shows that traders expect at least 30 basis points of easing towards the end of the year, down from nearly 40 on June 22.

In the UK, the docket remained absent, but the resignation of UK Prime Minister Keir Starmer opened the door for Andy Burnham. Burnham, who is seen as Starmer’s successor, is said not to retain the Chancellor Rachel Reeves, and there’s speculation of whom he would choose to succeed her.

Last year, Burnham called for an end to the UK’s dependence on foreign lenders, which triggered worries about him becoming the Prime Minister.

Mark Dowding, chief investment officer at the hedge fund RBC BlueBay, said that “He is boxed in by the fact that government finances are in a weak position, and if he chooses to ignore this reality, then he could find himself under pressure very quickly.”

Aside from this, the deal between the US and Iran pushed Oil prices lower, easing inflationary pressures. Meanwhile, the Bank of England is expected to hold rates unchanged at the July meeting, yet traders had priced in a rate hike by December.

GBP/]USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3207. The pair remains under pressure as it holds well below the clustered 50-, 100- and 200-day simple moving averages (SMAs) grouped around 1.3437, keeping the broader tone bearish after losing the prior uptrend support line that was broken near 1.3451. The Relative Strength Index (14) at roughly 36 drifts in bearish territory but above oversold conditions, hinting that sellers retain control while still leaving room for additional downside before stretched conditions emerge.

On the topside, the SMA cluster around 1.3437 is the first significant resistance, followed by the descending resistance trend line that was last violated around 1.3537, where prior reactions suggest renewed supply. On the downside, initial demand is expected around the former rising trend-line origin close to 1.3159 and the nearby recent low area around 1.3167; a decisive break beneath this band would expose deeper losses, while holding above it would merely signal consolidation within a still bearish daily backdrop.

(The technical analysis of this story was written with the help of an AI tool.)