**GBP/USD Weekly Forecast: 28th September to 3rd October 2025**
*Original analysis by DailyForex.com*
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The GBP/USD pair has remained under significant scrutiny as traders and investors continue to analyze shifting macroeconomic fundamentals and evolving technical dynamics. As we head into the final days of September and approach the beginning of October 2025, market participants are keenly focused on the key drivers shaping this major forex pair. This article provides an in-depth analysis of GBP/USD’s recent moves, fundamental catalysts, technical levels, and trader sentiment, giving forex traders valuable insights for the week ahead.
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**GBP/USD Review: Recent Performance and Context**
Over the past several weeks, the GBP/USD has demonstrated notable volatility amid heightened economic uncertainty and shifting market perceptions about both the UK and US economies.
*Recent price action highlights:*
– The pair experienced a decisive retracement from multi-month highs, with sterling coming under pressure amid mixed data from the UK.
– Volatility was fueled by hawkish commentary from US Federal Reserve officials, reinforcing expectations that US interest rates may remain at elevated levels for longer.
– UK macroeconomic releases continued to paint a complicated picture, with inflation showing signs of stubbornness even as economic growth indicators remain subdued.
Recent price action saw the GBP/USD battling near the psychological 1.2600 level, as both bulls and bears looked to seize directional control.
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**Fundamental Factors Driving GBP/USD**
Understanding the fundamental landscape is crucial to assessing GBP/USD’s outlook heading into October.
*UK Economic Outlook:*
– The Bank of England maintained its cautious stance amid persistent inflationary pressures, but recent data points to stalling economic growth.
– Consumer spending in the UK has shown signs of softening, and the country’s services sector—the backbone of the British economy—has delivered mixed performance, triggering concerns over a potential stagnation.
– The latest CPI print remained above the BoE’s 2% target, which could force policymakers to keep rates higher than the market anticipates.
– Political risks remain as the UK government faces increasing pressure to deliver on cost-of-living pledges ahead of the next general election.
*US Economic Dynamics:*
– The Federal Reserve left its benchmark rate unchanged at the latest FOMC meeting but kept the door open for future tightening as inflation remains resilient.
– Labor market data in the US has been robust, supporting the dollar. However, there are growing concerns that job growth may start to slow as higher rates feed through to the real economy.
– US GDP growth continues to outperform many developed peers, but there is rising uncertainty about the outlook for 2026 and beyond.
Overall, the juxtaposition of the Fed’s hawkish rhetoric and the BoE’s cautious approach sets the stage for continued volatility and directional ambiguity for the GBP/USD pair.
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**Key Events to Watch This Week**
GBP/USD traders will be keeping a close watch on several critical data releases and events in the upcoming week. These could shape near-term sentiment and drive price volatility.
*Major calendar events:*
– *UK GDP Data (Final):* The revised growth number could adjust market perceptions on the strength or fragility of the UK economy.
– *US Core PCE Price Index:* As the Fed’s preferred inflation gauge, this data point is crucial. A higher-than-expected release would likely reinforce the dollar’s strength.
– *UK Consumer Credit and Lending Figures:* These metrics will offer further insight into the health of the British consumer segment and potential signs of financial strain.
– *US ISM Manufacturing PMI:* While the US services sector remains healthy, any signs of deterioration in manufacturing could weigh on Fed rate hike expectations.
– *BoE and Fed official speeches:* Any unexpected commentary on inflation, rates, or the economic outlook can cause sudden GBP/USD moves.
Market participants will also monitor geopolitical developments and broader risk sentiment, as heightened global volatility continues to influence safe-haven flows into the dollar.
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**GBP/USD Technical Analysis: Support
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