GBP/USD Price Forecast: Extends decline below 20-day EMA
The GBP/USD pair is down 0.25% to near 1.3500 during the European trading session on Wednesday. The Cable faces selling pressure as the US Dollar (USD) trades firmly due to growing expectations that the Federal Reserve (Fed) will deliver at least one interest rate hike this year.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 98.50.
According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike this year have increased to 35.6% from 23.5% seen before the United States (US) Consumer Price Index (CPI) data release.
The data showed on Tuesday that the US headline CPI grew at a stronger pace of 3.8% Year-on-Year (YoY) compared to 3.7% estimates and the previous reading of 3.3%.
In the United Kingdom (UK), investors await the Q1 Gross Domestic Product (GDP) data, which will be released on Thursday. According to estimates, the UK economy expanded strongly by 0.6% against a 0.1% growth seen in the last quarter of 2025.
GBP/USD technical analysis
GBP/USD trades lower at around 1.3500, keeping a mildly bearish near-term bias as it holds below the 20-day Exponential Moving Average (EMA) at 1.3530 after failing to break above the 61.8% Fibonacci retracement of the latest swing at 1.3602.
The Relative Strength Index (RSI) at 49.6 hovers around the neutral line, hinting at waning upside momentum and suggesting rallies could remain capped while price stays under this immediate confluence of dynamic and Fibonacci resistance.
On the topside, initial resistance emerges at the 50.0% retracement level around 1.3518, closely followed by the 20-day EMA at 1.3530, with further hurdles at the 61.8% retracement near 1.3602 and then 1.3721 and 1.3873, corresponding to the 78.6% and 100% retracement levels. On the downside, first support is seen at the 38.2% Fibonacci retracement around 1.3434, ahead of a deeper floor at the 23.6% level near 1.3331, while a break below there would expose the structural anchor around 1.3163.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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