**Pound Sterling Forecast: GBP/USD Holds 1.34 Range Ahead of Key US ISM Release**
*By Currency News (Original Author Credit)*
The Pound Sterling (GBP) has displayed notable resilience against the US Dollar (USD) in the final quarter of the year, sustaining its ground within a well-established range. As we approach the anticipated release of the US ISM manufacturing data, market participants are watching closely to determine whether the GBP/USD pair will maintain its current trajectory or shift in response to upcoming economic indicators. This article explores recent price action, key drivers influencing the pair, technical analysis, fundamental outlooks, and market sentiment as traders brace for new data.
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### Recent GBP/USD Performance: Holding the Range
Over the past weeks, GBP/USD has been largely confined to a 1.34 trading range. After initial volatility earlier in the year, marked by central bank policy changes and shifting economic forecasts, the pair has settled into a consolidation phase. Investors have adopted a cautious stance in the absence of significant Brexit developments and with clearer guidance from both the Bank of England (BoE) and the Federal Reserve (Fed).
#### Highlights of Recent GBP/USD Activity
– Despite attempts to break higher or lower, strong support has been established near 1.3400, with resistance capping the upside at around 1.3460.
– On intraday charts, GBP/USD has tested both ends of this spectrum but repeatedly reverted to its central mean, suggesting equilibrium between buyers and sellers.
– Forex volatility has tapered compared to the dramatic swings following previous monetary announcements and key UK economic releases.
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### Key Factors Influencing GBP/USD
A spectrum of economic, political, and technical drivers shape the Pound-Dollar exchange rate. Currently, the balance between UK and US data, evolving central bank expectations, and risk sentiment dictates the next potential moves for the pair.
#### 1. Central Bank Policy Divergence
– **Bank of England (BoE):**
– The BoE has opted for a cautious approach on further rate hikes after its aggressive cycle through earlier quarters.
– Recent inflation data suggest that price pressures are cooling, allowing the BoE to signal a “wait-and-see” attitude rather than pre-committing to tightening or easing.
– Forward guidance remains data-dependent, with labor market conditions and wage growth closely monitored as signals for potential adjustments.
– **Federal Reserve (Fed):**
– The Fed has maintained its hawkish rhetoric in the face of sticky US inflation but has refrained from accelerating rate hikes in recent meetings.
– Market expectations indicate a growing consensus for an extended pause at current rates unless there is renewed evidence of inflation surging above target.
– Communication from FOMC officials underscores the importance of upcoming economic data, especially from the labor and manufacturing sectors.
#### 2. Macroeconomic Data Releases
– UK GDP growth figures, business sentiment surveys, and consumer price index (CPI) prints have set the tone for Sterling over the summer.
– The early September calendar is dominated by the US ISM Manufacturing PMI release, a bellwether for economic health, which has historically triggered sizeable moves in the Dollar and, by extension, GBP/USD.
– Notable data points that can move GBP/USD include:
– UK Services PMI and Manufacturing PMI reports
– US Non-Farm Payrolls and Unemployment Rate
– US Retail Sales and Core CPI data
– UK Retail Sales and Wage Growth statistics
#### 3. Risk Sentiment and Safe Haven Flows
– Global equity market volatility and geopolitical risks continue to sway forex flows, with the US Dollar benefiting during times of heightened uncertainty.
– Conversely, any improvement in European investor sentiment or signs of domestic stabilization in the UK can underpin Sterling.
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### Technical Analysis: GBP/USD Chart Patterns and Levels
The GBP/USD pair’s consolidation within a defined zone offers clues for both bullish and bearish traders. Technical analysis suggests that control remains evenly balanced as
Read more on GBP/USD trading.