• UK headline CPI rose 0.7% MoM in March, beating the 0.6% forecast, while core CPI cooled to 3.1% YoY from 3.2% prior.
• Thursday's UK flash PMIs are seen slipping into contraction, with Manufacturing forecast at 49.9 and Composite at 49.8.
• Friday's UK retail sales and US UoM inflation expectations round out a busy week for both currencies.

GBP/USD was little changed on Wednesday, settling close to 1.3510 after a choppy session that reached 1.3540 in London hours before fading toward 1.3490. Price has been pinned inside a 65-pip band through midweek, with long upper and lower wicks pointing to two-way uncertainty.

UK inflation data dominated Wednesday's London session. Headline Consumer Price Index (CPI) rose 0.7% MoM in March, slightly above the 0.6% consensus, with the annual rate edging up to 3.3% YoY, though core CPI cooled to 3.1% YoY against the 3.2% expected, tempering the hawkish read. The UK calendar stays busy from Thursday, with flash Purchasing Managers Index (PMI) surveys expected to show Manufacturing and Composite activity slipping into contraction at 49.9 and 49.8 respectively, and GfK Consumer Confidence seen deteriorating to -25 from -21. Friday's UK Retail Sales are forecast at 0.2% MoM, a tentative rebound from the -0.4% print in February.

On the US side, Thursday brings flash PMIs, with Services expected to return to the 50 threshold after a brief dip into contraction and Manufacturing holding near 52.5, alongside Initial Jobless Claims at 212K against 207K prior. Friday's University of Michigan (UoM) sentiment and inflation expectations cap off the week, with one-year inflation expectations seen steady at 4.8%. Broader direction for the US Dollar stays anchored by the Strait of Hormuz closure and elevated crude, while market hopes for a US-Iran resolution have softened as goalposts continue to shift.

GBP/USD 15-minute chart

Technical Analysis

In the fifteen-minute chart, GBP/USD trades at 1.3506, holding a mildly bearish near-term bias as it remains under the day’s open at 1.3517, which now acts as immediate intraday resistance. The Stochastic RSI has retreated from earlier overbought readings toward mid-range levels near 40, suggesting fading upside momentum after the latest pullback.

On the topside, the day’s open at 1.3517 is the first hurdle bulls need to reclaim to ease the current downside pressure and open the way to a more constructive recovery. On the downside, the absence of nearby mapped supports leaves the pair vulnerable to further slippage, with traders likely to monitor psychological round levels below 1.3500 as potential areas where dip-buying interest could emerge.

In the daily chart, GBP/USD trades at 1.3501. The pair holds a bullish near-term bias as price stands above both the 50-day and 200-day exponential moving averages (EMAs), which trend higher and suggest an underlying constructive tone. The elevated Stochastic RSI around 87 signals overbought conditions, hinting that upside momentum is stretched even as the broader setup remains supported by the rising medium-term averages.

On the downside, initial support emerges at the 50-day EMA near 1.3427, with the 200-day EMA around 1.3357 reinforcing a deeper demand zone on pullbacks. As long as the pair holds above these moving averages, buyers are likely to defend dips, though the overbought Stochastic RSI warns that consolidation or a corrective pause could precede any sustained extension of the uptrend.

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