FX.co ★ GBP/USD. Analysis and Forecast

Today, Thursday, the GBP/USD pair remains stable after two days of growth, trading around 1.3500. The pair is likely to continue strengthening amid U.S. dollar weakness caused by mounting concerns over the independence of the Federal Reserve.

Early Tuesday morning, U.S. President Donald Trump announced the dismissal of Fed Chair Lisa Cook from the Fed's Board of Governors, expressing readiness for legal proceedings against Cook over alleged mortgage document forgery.

Cook's departure may increase the likelihood of a significant rate cut, as Trump's pressure on the central bank to lower borrowing costs continues to grow. According to CME FedWatch, traders now see more than an 88% probability of at least a quarter-point rate cut in September, up from 82% last week.

On the other hand, the GBP/USD exchange rate showed little reaction to data from the Confederation of British Industry (CBI), which reported a modest improvement in retail sales: -32 in August compared to -34 in July, better than the expected -26. The figures indicate that retail sales volumes have been contracting for the 11th consecutive month.

The Bank of England noted that despite rising costs, companies are raising prices more slowly than during the summer, prompting the central bank to remain cautious. At the same time, weak demand and rising labor costs are reducing profitability, undermining confidence, and forcing companies to cut hiring and investment.

Today, for better trading opportunities, attention should focus on the release of U.S. Q2 annualized GDP data. However, special attention should be given to Friday's release of the July Personal Consumption Expenditures (PCE) Price Index, which the Fed views as its preferred inflation gauge.

From a technical perspective, oscillators on the daily chart are neutral, and the pair has failed to consolidate above the psychological resistance level at 1.3500. The next resistance lies at 1.3530, and a break above it would open the way toward the supply zone at the round level of 1.3600.

On the other hand, support is seen at the 9-day EMA at 1.3475. Below this, support is located at the 100-day SMA at 1.3430. Failure to hold this level would send prices down toward the round level of 1.3400, below which the bias would shift in favor of the bears.