1.3140 Area: GBP/USD Price Forecast Points to Likely Retest of Four-Month Low

Near 1.3222, GBP/USD remains subdued as the US Dollar leads.
Rising US core inflation underpins the US Dollar’s strength.
Next week’s major UK economic releases are in focus for investors.

GBP/USD remains vulnerable near its four-week low of 1.3222. During Friday’s European session, continued US Dollar (USD) outperformance keeps the British Pound (GBP) under pressure.

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

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

0.3% core inflation supports Dollar momentum as Fed rhetoric stays hawkish

Further Dollar gains have a supportive backdrop, according to strategists at RBC, 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 policy rhetoric and inflation, adding that “the combination of hawkish Fedspeak and a US CPI beat earlier this week continues to pay dividends for the dollar.”

Tuesday’s US Consumer Price Index (CPI) release for October put core inflation at 0.3%, above estimates of 0.2%. The core measure strips out volatile food and energy items.

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

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

1.3234: GBP/USD Technical Analysis Points to Near-Term Weakness

At 1.3234 on the daily chart, GBP/USD remains below its 20-day Exponential Moving Average (EMA) of 1.3338, keeping the near-term outlook bearish. Recovery attempts look constrained while the pair fails to regain this short-term trend gauge. Meanwhile, the Relative Strength Index (14), near 40, points to weak but stabilising downside momentum, rather than intense selling pressure.

To ease the bearish bias and allow a more constructive recovery, GBP/USD would need a sustained break above immediate resistance at the 20-day EMA near 1.3338. The indicators provided offer no clearly defined support levels nearby, leaving recent chart lows as potential interim floors for traders. Overall, the technical backdrop favours caution for 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.)

Economic Data Indicator

Consumer Price Index Excluding Food & Energy (MoM)

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

Learn more.

Latest release: Tue 10 November 2026 13:30

Release frequency: Monthly

Reported figure: 0.3%

Consensus forecast: 0.2%

Prior reading: 0.3%

Data source: US Bureau of Labor Statistics

CPI: Significance for Traders

Around 2% YoY is the inflation rate envisaged under the US Federal Reserve’s mandate. The central bank has two objectives: price stability and maximum employment. Since the onset of the global pandemic, which continues to this day, inflation has become the weakest part of that mandate. Supply-chain disruptions and bottlenecks continue to drive price pressures higher, leaving the Consumer Price Index (CPI) at multi-decade highs. Having already acted to curb inflation, the Fed is expected to retain an aggressive policy stance for the foreseeable future.