- The GBP/USD forecast shows a continuing decline after Friday’s poor UK GDP data.
- Trump announced a 30% tariff on the Eurozone and Mexico.
- This week, the US CPI report will shape the outlook for rate cuts.
The GBP/USD forecast shows a continuing decline after the UK released downbeat GDP data in the previous session. At the same time, the dollar edged higher on Monday after Trump announced new tariffs over the weekend. Meanwhile, market participants are gearing up for the US CPI report this week.
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The pound dropped on Friday after data revealed that the UK economy contracted by 0.1%. Meanwhile, economists had forecasted a 0.1% expansion. This was the second contraction in a row, raising concerns about the state of the economy. At the same time, it adds pressure on the Bank of England to lower borrowing costs and spur economic growth.
Elsewhere, Trump announced a 30% tariff on the US’s major trading partners on Saturday. The Eurozone and Mexico will suffer this high levy if there is no trade deal before the August 1 deadline. The US president has already threatened higher tariffs for other countries like Brazil, Canada, Japan, and South Korea. However, his recent threats have had little impact on financial markets.
At the same time, Trump continued his attacks on Fed Chair Powell, asking him to step down if he cannot lower borrowing costs. This week, the US CPI report will shape the outlook for rate cuts. A downbeat report would increase the likelihood of a Fed rate cut in September.
GBP/USD key events today
Market participants do not expect any key economic releases from the UK or the US. Therefore, they will keep digesting Friday’s releases.
GBP/USD technical forecast: Bears eye the 1.3400 support


On the technical side, the GBP/USD price has made new lows after breaking below a solid resistance zone. Initially, bears had paused above the 1.3601 key level and the 0.5 Fib retracement level. The price consolidated until the 30-SMA caught up. Eventually, bears gained enough momentum to breach the support zone.
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After the break, the price has dropped in a sharp move below the 30-SMA. At the same time, the RSI has dipped into the oversold region, suggesting solid bearish momentum. Given the strong bearish bias, the price might soon reach the 1.3400 support level. However, there might be a pause before the downtrend continues. A break below the 1.3400 level would solidify the bearish bias.
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