Facts:
- GBPUSD has been trading below the 30-day Exponential Moving Average (EMA30, light purple) since October 20, 2025.
- The pair broke below support around 1.32, defined by the lows from late July and early August.
- UK CPI inflation held steady at 3.8% in September, below the Bloomberg consensus forecast of 4%.
Recommendation:
- Short position (Sell) on GBPUSD at market price
- Take Profit (TP): 1.30000 (TP1), 1.28700 (TP2)
- Stop Loss (SL): 1.33200
Source: xStation5
Opinion
GBPUSD remains in a downward trend, which began in September in response to the weakness in the UK long-term bond market and growing concerns about the 2026 budget. The planned tax increases—both corporate and income—are intended to boost fiscal revenues necessary to finance struggling public services and improve productivity through infrastructure modernization. However, in the short to medium term, higher taxes are likely to weigh on business activity and consumer demand.
Worsening economic stagnation prospects have increased expectations for monetary policy easing in the UK. Following the latest Fed rate cut, the BoE’s policy rate (4.00%) remains among the highest in the G10 (on par with the U.S. at 3.75–4.00%).
Currently, swap markets are pricing in only a 27% probability of a 25 bp rate cut by the Bank of England next week. However, given the weaker-than-expected September inflation reading (which accelerated GBPUSD’s declines) and the drop in the retail price index, the central bank may feel comfortable at least signaling a shift toward easing. This, in turn, could reinforce the pair’s downward trend.
Methodology
The recommendation is based on a technical analysis of the GBPUSD chart and a fundamental analysis of both economies (monetary and fiscal policy). The trade direction was determined using Exponential Moving Averages (short-term averages below long-term ones, indicating a bearish trend) and market expectations regarding the upcoming Bank of England meeting.
Take Profit and Stop Loss levels were determined using Price Action methodology.TP1 and TP2 correspond to the boundaries of the March consolidation range, while the Stop Loss is set near the 23.6% Fibonacci retracement level of the last conso
