GBP/USD Price Forecast: Can the bullish tone near 1.3400 hold ahead of Wednesday’s BoE decision?

GBP/USD posts modest gains on Monday as optimism over Iran diplomacy weighs on safe-haven demand for the USD.
Ahead of the key central bank decision, expectations of a BoE rate hike lend additional support to the GBP and the pair.
With the technical picture remaining favourable, further upside appears to be the path of least resistance.

Buying interest on dips lifts GBP/USD back to 1.3400 in Monday’s Asian session as the new week begins. The recovery interrupts a modest retreat from Friday’s peak, the pair’s highest level since 16 September.

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

Safe-haven demand for the US Dollar (USD) is weakening amid renewed hopes that a diplomatic breakthrough could bring the US-Iran war to an end. By contrast, expectations that the Bank of England (BoE) will tighten monetary policy continue to underpin the British Pound (GBP). While this combination supports GBP/USD, buyers appear reluctant to build aggressive positions before this week’s key central bank decision and major US economic releases.

A 25 basis points (bps) interest rate increase is widely anticipated when the BoE delivers its policy decision on Wednesday. In the US, the data calendar begins with the ISM Manufacturing PMI later today, followed by Wednesday’s ISM Services PMI and Friday’s closely watched Nonfarm Payrolls (NFP) report. Developments in the Middle East crisis could also affect the USD and give GBP/USD fresh direction.

A mildly bullish technical bias persists while the pair trades above its 100-day Simple Moving Average (SMA) at 1.3387, although a cluster of Fibonacci resistance lies just overhead. Momentum signals also favour buyers: the Relative Strength Index (RSI) is near 57, while the Moving Average Convergence Divergence (MACD) indicator remains positive and constructive above zero. Together, these readings support the prospect of further GBP/USD gains.

The first upside hurdle is the 50.0% retracement at 1.3407. If buyers sustain the advance, the next objectives are the 61.8% level at 1.3471 and the 78.6% retracement at 1.3561. Support initially lies at the 100-day SMA of 1.3387, ahead of the 38.2% Fibonacci retracement at 1.3344. A more pronounced decline would bring the 23.6% level at 1.3265 into focus, followed by the structural Fibonacci anchor near 1.3138.

The near-term outlook would remain positive provided GBP/USD stays above the 100-day SMA and the retracement supports beneath it. A decisive daily close beyond 1.3407, however, is required to pave the way for a stronger rise towards 1.3471 and 1.3561.

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

GBP/USD: What does the daily chart signal?

Economic Data Watch

BoE Interest Rate Decision: What Does It Mean for GBP?

At the conclusion of each of its eight scheduled meetings a year, the Bank of England (BoE) sets out its interest rate decision. A rate increase accompanied by a hawkish assessment of the economy’s inflation outlook is generally positive for the Pound Sterling (GBP). Conversely, a dovish assessment of the UK economy, with rates either held steady or reduced, is generally viewed as negative for GBP.

Upcoming release: Thu, 5 Nov 2026 12:00

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Consensus estimate: -

Previous reading: 3.75%

Data source: Bank of England