**GBP/USD Weekly Forecast: 31st August to 5th September 2025**
*Adapted from DailyForex by Christopher Lewis*
**Introduction**
The GBP/USD currency pair continues to be one of the most closely watched pairs in the forex market, offering insights into the health of both the UK and US economies. With the end of August and the start of September signaling a transition between summer and autumn trading seasons, the GBP/USD is poised at a critical juncture. Market participants are weighing several key economic, technical, and geopolitical drivers that could shape price action in the coming week.
**Fundamental Overview**
The British Pound has experienced heightened volatility in recent sessions, reflecting a combination of domestic UK factors and broader US Dollar dynamics. Heading into the week of August 31st to September 5th, traders should pay particular attention to:
– **UK Economic Data**: Recent UK data has been resilient, but headwinds from persistent inflation and stagnant wage growth continue. The Bank of England’s (BOE) policy outlook is central to Pound sentiment, with officials grappling between inflation fears and growth risks.
– **US Data and Federal Reserve Policy**: Meanwhile, the US Dollar remains buoyed by persistent speculation about the Federal Reserve’s rate trajectory. Mixed inflation readings and labor market uncertainty have left traders divided over potential rate cuts later in the year.
– **Geopolitical Developments**: Continued global uncertainty, ranging from ongoing tensions in Eastern Europe to shifts in commodity prices, also influences risk sentiment and the USD’s safe-haven demand.
The interplay among these factors creates the foundation for the upcoming week’s forecast.
**Key Economic Events This Week**
Traders should focus on the following major events and data releases:
– **UK Manufacturing PMI (September 2nd)**: A key early indicator of the UK’s economic momentum.
– **BOE Speakers (throughout the week)**: Comments by BOE policymakers can prompt significant Pound volatility.
– **US ISM Manufacturing PMI (September 3rd)**: A leading gauge for US industrial health, closely watched by FX traders.
– **US Non-Farm Payrolls (September 5th)**: The most significant US labor market release, likely to trigger major USD moves.
**Technical Analysis**
GBP/USD has been consolidating after a period of volatile swings. Price action remains crucial as the pair navigates key support and resistance levels.
***Weekly Chart Overview***
– GBP/USD has been trading within a broad sideways channel between approximately 1.2560 and 1.2890 since early July.
– The 50-week moving average (currently near 1.2670) is acting as near-term dynamic support.
– The long-term uptrend, established from the 2022 lows, is showing signs of fatigue, with momentum indicators like RSI hovering in neutral territory, suggesting a potential for a decisive breakout in either direction.
***Daily Chart Levels***
– **Support Levels**:
– 1.2670: Dynamic support from the 50-day and 50-week moving averages.
– 1.2625: Strong horizontal support and previous multi-week lows.
– 1.2560: Zone of heavy bids and longer-term structural support.
– **Resistance Levels**:
– 1.2795: Last week’s swing high and first intraweek resistance.
– 1.2890: July highs and major ceiling capping prior rallies.
– 1.3000: Psychological round number and critical breakout point.
– **Momentum and Oscillators**:
– RSI on the daily chart sits just above 50, signaling mild bullish momentum but with no confirmation of a strong trend.
– MACD remains flat, reinforcing the sense of rangebound price action.
**Scenario Analysis for the Week Ahead**
Given the convergence of summer’s end, major economic data, and central bank commentary, multiple scenarios could unfold for the GBP/USD pair.
**Scenario 1: Bull
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