• GBP/USD forecast remains higher as the UK budget provides near-term support.
• The US dollar remains weak amid soft economic data and increased dovish expectations from the Fed.
• Technically, the prices remain protected by the 200-MA support.

The GBP/USD forecast remains elevated as the pair rallied for its seventh straight session, trading near 1.3240 in Friday’s earlier session. The US dollar remains weak amid aggressive expectations for a Fed rate cut. The CME FedWatch tool now shows the market pricing in an 87% probability of a rate cut at the December meeting, a dramatic jump from last week’s lows of 31%. Markets now anticipate three more cuts in 2026 as well. The shift accelerated after reports that Kevin Hasset is the leading candidate to succeed Fed Chair Powell, as he’s considered rate-friendly, aligning with Trump’s preference for low rates.

The British pound is also benefiting from domestic narratives, as markets digest Rachel Reeves’ UK Autumn Budget. Although the OBR’s forecasts leaked earlier, causing volatility, the larger-than-expected £22 billion fiscal buffer, lower gilt yields, and stable financial outlook helped sterling recover. Growth projections were revised lower, while tax burden is expected to climb toward historic highs. However, the near-term fiscal space restrained the downside for GBP. The pair reached the 4-week top near 1.3280 before consolidating gains during the thin liquidity sessions amid the Thanksgiving holidays.

On the monetary front, traders remain convinced that the Bank of England will cut rates at its next meeting, with the probability rising to 70%. Softer wage data, declining inflation pressures, and weak retail sales are pushing the central bank to ease policy. Governor Bailey noted that the disinflation trend remains in line with expectations, allowing room for more flexibility.

On the other hand, the dollar remains weak as sluggish durable goods orders and weak Chicago PMI data put further pressure on it. Although thin liquidity is preserving further movement, the downside bias in the dollar remains intact.
 

GBP/USD Technical Forecast: Correction Paused by 200-MA
 

(Click on image to enlarge)

GBP/USD 4-hour chart
 

The 4-hour chart for the GBP/USD pair shows a mild correction, finding support near the 200-period MA. The news-led spike on Wednesday formed a bullish pinbar pattern, protecting the pair from a deeper fall. The RSI is tilting downwards, suggesting consolidation around the 1.3200 area.

The bullish scenario for the pair could propel prices higher, aiming for a 4-week high near 1.3280, ahead of 1.3300. However, a bearish reversal could push prices below 1.3200 and target 1.3160, with a potential aim of 1.3100.

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