British Pound under pressure against USD as Wednesday’s UK Autumn Budget and FOMC approach

• GBP/USD posts a modest gain on Tuesday, but buying conviction remains weak as major event risks approach.
• Wednesday brings the UK Autumn Budget, followed by the pivotal FOMC decision.
• Fresh direction for the pair will also come from US Q3 GDP figures and the PCE Price Index.

The mid-1.3300s remain out of reach for GBP/USD. The pair stays under pressure in Tuesday's Asian session, although it remains above the previous day's swing low. Losses appear contained as traders show reluctance to take aggressive positions before this week's major event risks.

Bond market stability is expected to be the priority when UK Chancellor John Healey presents his first Autumn Budget on Wednesday, following Prime Minister Andy Burnham's large spending plans. Investors will examine the proposed public expenditure and additional funding plans, focusing on how they can be financed without provoking an adverse reaction in gilts. Those details will be an important driver of the British Pound (GBP), giving GBP/USD a meaningful catalyst.

Wednesday's US Federal Reserve (Fed) decision is another focus, with markets increasingly accepting that interest rates will remain unchanged. With no updated economic forecasts due, investors will scrutinise the accompanying policy statement and Fed Chair Kevin Warsh's remarks at the post-meeting press conference for further guidance on the policy path. That outlook will help shape moves in the US Dollar (USD) and GBP/USD.

Thursday will bring two further major US releases: the Advance Q3 GDP growth report and the Personal Consumption Expenditures (PCE) Price Index. Until then, expectations of another US interest rate increase in December and geopolitical uncertainty continue to support the USD. The prospect of tighter Bank of England (BoE) policy, however, should constrain losses in GBP/USD.

GBP/USD: daily price chart

Technical Outlook

At 1.3389, the 100-day Simple Moving Average (SMA) continues to cap GBP/USD, alongside a cluster of overhead Fibonacci levels. Trading just below the 38.2% retracement at 1.3344, spot prices suggest that rallies remain vulnerable. The broader rebound from the 1.3141 cycle low is still struggling to overcome medium-term resistance.

Beyond the 100-day SMA, the next significant resistance lies near 1.3407, the 50.0% retracement. Further hurdles stand at 1.3470 (61.8%) and 1.3559 (78.6%), followed by the 1.3673 swing high. Initial downside support lies at 1.3267, the 23.6% retracement. Below that, the 1.3141 cycle low provides a deeper structural floor, where a sharper retreat would be expected to attract stronger buying interest.

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