1.3400 area: British Pound loses momentum as US business strength boosts Dollar

0.16% lower at 1.3378: GBP/USD weakens as US Dollar demand returns.
56: US Manufacturing PMI advances despite deteriorating consumer sentiment.
UK Retail Sales lose momentum sharply before next week's Fed decision.

Pound Sterling is down around 0.16% against the US Dollar on Friday. US business activity is expanding, but consumer sentiment is deteriorating as households complain about high prices. GBP/USD stands at 1.3366.

GBP/USD declines on firm US activity and weak UK Retail Sales

Middle East tensions remain elevated. US President Trump said “we could end the war with Iran very quickly”, before adding “do we want to finish it or let it within is the question.” He offered reassurance that the US controls the Strait of Hormuz.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Attacks by the Houthis on Saudi Arabia's interests continued. Iran’s IRGC also kept striking ships passing through the Strait via an “illegal route.”

US figures pointed to continued business expansion, although at a slower rate. October's S&P Global Manufacturing PMI registered 56, up from September's 55.9. In services, the PMI slipped to 57.9 from 58.8, matching economists' expectations. Higher prices and expectations of higher rates were behind a decline in the University of Michigan Consumer Sentiment Index. The October reading reached a five-month low of 48, compared with 48.1 in the preceding month.

One-year inflation expectations held at 4.7%, while the five-year measure was 3.5%.

As the US Dollar recovered part of its earlier losses, GBP/USD gave back some gains. The US Dollar Index (DXY), which tracks the currency against a basket of six currencies, has risen 0.17% to 101.79.

The Federal Reserve's monetary policy decision and the Core Personal Consumption Expenditures (PCE) Price Index are on traders' radar for next week.

UK releases presented a mixed picture. A rise in the S&P Global Composite PMI took it to 53.1 from September's 52.0. Retail Sales, however, slowed from 2.7% to 0.8% over the same period, falling short of forecasts.

On Friday, British Prime Minister Andy Burnham said businesses would be given “breathing space to grow.” by next week’s first annual budget statement.

GBP/USD Price Forecast: Key Technical Barriers

Chart Analysis GBP/USD — Daily price chart for GBP/USD

At 1.3367 on the daily chart, GBP/USD retains a bearish short-term bias. Capping the pair are the simple moving averages clustered near 1.3404 and descending trend-line resistance at 1.3402, originating from 1.3653. Former rising trend supports at 1.3628 and 1.3811 also sit above the current price and now serve as resistance. Meanwhile, the Relative Strength Index (14) reads 54.5, suggesting only moderate corrective upside momentum, rather than a lasting shift towards a bullish trend.

The descending trend line near 1.3402 provides the first upside barrier, with the cluster of three simple moving averages at 1.3404 immediately beyond it. Only a daily close above this zone would ease near-term downside pressure. Higher resistance becomes progressively stronger at the former rising trend supports of 1.3628 and 1.3811. If the decline continues, the nearest key structural support lies at the broken resistance trend line around 1.3266, where buyers could try to limit the fall.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Pound Sterling Performance This week

This week's percentage moves in the British Pound (GBP) against the major currencies listed appear in the table below. The US Dollar was the currency against which the British Pound performed best.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.08%	-0.44%	-0.64%	-0.83%	-1.06%	-0.75%	-0.14%
EUR	0.08%		-0.33%	-0.54%	-0.72%	-0.89%	-0.62%	-0.04%
GBP	0.44%	0.33%		-0.23%	-0.38%	-0.56%	-0.30%	0.35%
JPY	0.64%	0.54%	0.23%		-0.17%	-0.40%	-0.09%	0.63%
CAD	0.83%	0.72%	0.38%	0.17%		-0.24%	0.12%	0.73%
AUD	1.06%	0.89%	0.56%	0.40%	0.24%		0.24%	0.88%
NZD	0.75%	0.62%	0.30%	0.09%	-0.12%	-0.24%		0.65%
CHF	0.14%	0.04%	-0.35%	-0.63%	-0.73%	-0.88%	-0.65%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the British Pound on the left and following its row across to the US Dollar gives the percentage change for GBP (base)/USD (quote) in the intersecting cell.