GBP/USD Price Forecast: Is a Retest of the Four-Month Low Near 1.3140 Likely?

GBP/USD remains under pressure around 1.3222 amid US Dollar outperformance.
An increase in US core inflation supports the US Dollar’s strength.
Next week’s major UK economic releases are in focus for investors.

Continued US Dollar (USD) outperformance is weighing on the British Pound (GBP) during Friday’s European session. GBP/USD appears vulnerable as it hovers near its four-week low of 1.3222.

A fresh 19-month high of 103.28 is recorded by the US Dollar Index (DXY) during European trading. The index tracks the Greenback against six major currencies.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Can hawkish Fed rhetoric and firm US inflation sustain Dollar momentum?

Further Dollar strength is supported by the backdrop described by RBC strategists, who note that “U.S. core-inflation pressures are building, while the labour market remains historically tight,”. The FX team at ING also points to supportive factors, saying that “the combination of hawkish Fedspeak and a US CPI beat earlier this week continues to pay dividends for the dollar.”

Released on Tuesday this week, the October US Consumer Price Index (CPI) report showed core inflation rising by 0.3%, faster than the 0.2% forecast. This measure excludes volatile food and energy items.

For the British Pound, attention in financial markets now turns to next week’s United Kingdom (UK) releases: labour market figures for the three months ending September and Consumer Price Index (CPI) data for October.

Expectations for the Bank of England’s (BoE) interest rates are likely to be significantly influenced by both indicators.

Can GBP/USD Overcome Its Bearish Technical Bias?

A bearish near-term outlook persists on the daily chart, with GBP/USD at 1.3234 and spot trading below the 20-day Exponential Moving Average (EMA) of 1.3338. Failure to regain this short-term trend indicator suggests that upside attempts remain constrained for now. Meanwhile, a Relative Strength Index (14) reading near 40 points to weak but stabilising downward momentum, rather than intense selling pressure.

For the bearish tone to ease and a more constructive recovery to become possible, GBP/USD would need a sustained break above immediate resistance at the 20-day EMA, near 1.3338. The indicators provided do not identify clear support levels nearby, so traders may refer to recent lows on the price chart for interim floors. Overall, the technical outlook favours caution as long as the pair remains below its short-term moving average.

(An AI tool assisted in preparing this story’s technical analysis. Learn more.)

What Does This Economic Indicator Measure?

Consumer Price Index excluding Food & Energy (MoM)

The Consumer Price Index (CPI) tracks inflationary or deflationary trends by periodically adding up prices across a representative basket of goods and services. Compiled monthly, the data is published by the US Department of Labor Statistics. The month-on-month (MoM) reading compares goods prices in the reference month with those in the preceding month. The CPI Ex Food & Energy removes the food and energy components, which are considered more volatile, to provide a more accurate gauge of price pressures. A higher reading is generally regarded as bullish for the US Dollar (USD); a lower reading is generally viewed as bearish.

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Latest release: Tue 10 November 2026 13:30

Release frequency: Monthly

Actual reading: 0.3%

Consensus estimate: 0.2%

Prior reading: 0.3%

Data source: US Bureau of Labor Statistics

Why should traders watch this release?

Persistent inflation is expected to keep the US Federal Reserve’s policy stance aggressive for the foreseeable future, with measures to curb price growth already in place. Supply-chain disruptions and bottlenecks continue to push prices higher, leaving the Consumer Price Index (CPI) at multi-decade highs. Maintaining stable prices and maximum employment form the Fed’s dual mandate, under which inflation should be around 2% YoY. Since the onset of the pandemic, which continues to affect the world, inflation has become the weakest pillar of that mandate.