GBPUSD News Analysis: US Inflation and UK GDP Data

The pound has stayed steady after rising for six days, but new economic reports from the US and UK this week could change that.

Pound Holds Its Ground After Strong Run

The British pound was trading around $1.3460 on Monday morning, consolidating after six days of gains. Since the start of 2025, the pound has gained 7.6% against the U.S. dollar, though it lags the euro, which has gained 13% over the same period.

Recent gains have been driven by a weaker US dollar, following softer US economic data plus disappointing July jobs report and steady policy from the Bank of England.

US Inflation will be Market Driver on Wednesday

The July Consumer Price Index will be released on Wednesday. Economists expect a 2.8% annual increase, slightly higher than June’s 2.7%.

• Lower than expected CPI: Could strengthen the case for a Fed rate cut in September.
• Higher CPI: Could push the Fed to hold rates longer.

The core CPI, which excludes food and energy, will reflect the underlying inflation trend.

Thursday Key Release: UK GDP

Thursday’s data will give a full GDP picture for the UK, it will cover monthly, quarterly, and annual growth.

• Stronger than expected growth may extend pound’s rally and show resilience despite high borrowing costs.
• Weak growth: Could reignite talk of Bank of England rate cuts later this year.

US Retail Sales to Close the Week

On Friday, US retail sales for July are expected to show 0.5% growth, down from June’s 0.6%. Weak reading would suggest slowing consumer spending, supporting the case for a more dovish Fed and stronger sales could give the US dollar a short term lift.

What to Watch for GBPUSD

For the GBPUSD, the most bullish scenario this week would be softer US data combined with stronger UK growth, this could push GBPUSD higher. On the flip side, hot US inflation or weak UK GDP could break the pound’s rising trend.

GBPUSD Technical Analysis

On the weekly chart, GBPUSD is approaching a major resistance area between 1.33 and 1.36. This zone is powerful because a descending trendline and an ascending support line are converging and forming a decision zone. A breakout above 1.36 could create upside momentum toward 1.40, while a rejection could push the pair back toward support near 1.25.

On the daily and 4-hour charts, the pair is trading near a downward trendline. Sellers may defend it, pushing prices back toward 1.3140. But if buyers push through and hold above the trendline, the pair could rally toward 1.3590.

On the 4-hour chart, there’s a support zone around 1.3370. A drop below this level would open the door to lower prices; conversely, a bounce here could fuel bullish moves toward 1.38.

What Could Happen

• Bullish breakout: If GBPUSD clears the trendline and 1.36 resistance convincingly, the pair could head toward 1.40.
• Rejection and pullback: A failure to break resistance may mean a drop back toward 1.3370 and potentially 1.3140.
• Bounce from support: A rebound off the 1.3370 zone might offer a short-term move toward 1.36.