GBP/USD Price Forecast: Flat Lines Near 1.3500 As Bulls Shrug Off UK GDP Ahead Of US CPI

GBP/USD struggles to capitalize on the upbeat UK GDP-led modest intraday uptick.
Rising Fed rate hike bets and geopolitical risks support the USD, capping spot prices.
The technical setup warrants some caution for bulls ahead of the key US CPI report.

The GBP/USD pair struggles to capitalize on its modest intraday gains and trades near the 1.3500 psychological mark during the first half of the European session on Friday. Spot prices, however, hold above the weekly low as traders await the release of the latest US consumer inflation figures before placing fresh directional bets.

The British Pound (GBP) gets a minor lift following the release of the better-than-expected monthly UK GDP report, showing that the economy expanded at a pace of 0.4% in July, compared to consensus estimates for a flat reading. The immediate market reaction, however, turns out to be short-lived as rising bets for an imminent rate hike by the US Federal Reserve (Fed), bolstered by the US Producer Price Index (PPI) on Thursday, act as a tailwind for the US Dollar (USD). Furthermore, persistent geopolitical uncertainties underpin the safe-haven buck and contribute to capping the currency pair.

From a technical perspective, the GBP/USD pair currently holds just beneath the 200-period Simple Moving Average (SMA) on the 4-hour chart, at 1.3518, which keeps the near-term tone mildly bearish despite spot prices hovering close to recent highs. The 38.2% Fibonacci retracement of the latest swing, at 1.3522, reinforces this nearby resistance zone, while the Relative Strength Index (RSI) around 42 and a slightly negative Moving Average Convergence Divergence (MACD) histogram hint that the upside momentum is starting to fade rather than accelerating.

Meanwhile, immediate resistance is clustered between the 200-period SMA at 1.3518 and the 38.2% Fibo. retracement at 1.3522, with the 23.6% retracement higher up at 1.3580 acting as the next barrier if buyers regain control. On the downside, initial support is seen at the 50.0% retracement near 1.3475, followed by the 61.8% Fibo. at 1.3428, while deeper pullbacks could expose the 78.6% level at 1.3361 and the prior swing floor around 1.3276.