VT 
The British pound (GBP/USD) opens the week trading near 1.3400 to 1.3440, caught in a tight range as traders digest a wave of disappointing UK economic data and brace for global macro headwinds. With the pair trading below key resistance at 1.3470 to 1.3500 and under pressure from multiple short-term moving averages, the path forward hinges on both domestic fundamentals and broader risk sentiment.
UK economic weakness fuels BoE rate cut speculation
Recent labor market data has painted a mixed but increasingly fragile picture of the UK economy. The unemployment rate rose to 4.8% in August, its highest since May 2021, while wage growth slowed to 4.4%, missing expectations. The number of payrolled employees also declined, signaling that hiring momentum is fading. These developments have intensified market speculation that the Bank of England may consider rate cuts in early 2026, especially as inflation remains sticky but no longer accelerating.
Globally, the U.S. dollar remains firm as traders await further clarity from the Federal Reserve. While recent U.S. business sentiment data suggests a potential slowdown, Fed officials have maintained a cautious tone, keeping rate cut expectations in check. Meanwhile, geopolitical tensions and trade policy shifts, particularly the renewed U.S.–China tariff standoff, continue to influence risk appetite, indirectly impacting GBP/USD flows.
Technical analysis: GBP faces key resistance
GBP/USD remains capped below the 1.3470 to 1.3500 resistance zone. A decisive break above 1.3535 would signal a bullish reversal and open the door to 1.3550 and 1.3600. On the downside, a break below 1.3322 could resume the broader downtrend, targeting 1.3300 and potentially 1.3140 if momentum accelerates.
- Resistance: 1.3470, 1.3500, 1.3550, 1.3600
- Support: 1.3410, 1.3330, 1.3300, 1.3140
- Bullish setup: Long entries on breakout above 1.3470–1.3500 with confirmation.
- Bearish setup: Short positions on rejection from resistance or break below 1.3322.
- Range play: Buy near 1.3330, sell near 1.3470 with tight stops until breakout confirms direction.
What to watch this week
With GBP/USD hovering near mid-range levels, traders should monitor upcoming UK inflation data, U.S. retail sales, and central bank commentary for directional cues. Until a breakout occurs, the pair is likely to remain range-bound, with macro headlines driving short-term volatility.
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