GBP/USD Price Forecast: Strengthens above 1.3550, upside bias intact while holding above 100-day SMA

The GBP/USD pair trades in positive territory around 1.3550 during the early European trading hours on Wednesday. UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK. This move provides some support to the British Pound (GBP) against the US Dollar (USD).

UK Chancellor on Monday announced plans to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham's plan to devolve power away from central government. Healey also stressed his commitment to fiscal discipline and to curbing rising costs for business and the public, including a 25% reduction in regulatory costs by the next election due in 2029.  

The Bank of England (BoE) is expected to hold the interest rate at 3.75% for the rest of the year and through at least mid-2027, according to a Reuters poll. BoE Governor Andrew Bailey said on Tuesday he wanted to dispel the idea that it's just a matter of time before the central bank hikes interest rates, rather than a possibility that hinges on economic and geopolitical developments.

GBP upside bias builds but UOB keeps Pound in broad range

Analysts at UOB Group note that GBP/USD was confined to a relatively tight band at the end of last week, with the Pound “traded between 1.3482 and 1.3550 last Friday and closed little changed at 1.3518 (-0.05%).” They recall that “the price action did not lead to any shift in either downward or upward momentum,” and had expected GBP “to trade in a range between 1.3490 and 1.3540.” In the event, the pair “did not quite trade within the expected range, as it edged up from 1.3508 to 1.3547.”

While UOB still sees “no significant increase in upward momentum,” the bank judges that “the bias for GBP today appears tilted to the upside, likely toward 1.3565,” though it “do[es] not expect the major resistance at 1.3600 to come into view.” On the downside, the strategists flag that “a breach of 1.3520 (minor support is at 1.3530) would mean that the upside bias has faded.”

From a broader perspective, UOB reiterates that “there is not much to add” to its recent medium-term assessment, with GBP “neutral now and it is likely to trade between 1.3480 and 1.3600” over the next one to three weeks.

Technical Analysis: GBP/USD retains a bullish tone above the 100-day SMA

In the daily chart, GBP/USD holds a mild bullish bias as price remains above the 100-day Simple Moving Average (SMA) and the lower Bollinger Band, suggesting underlying demand on dips. However, spot is now just under the Bollinger mid-line, which acts as immediate resistance, while the Relative Strength Index (RSI) near 54 points to steady but not overextended bullish momentum.

On the topside, a daily close above the Bollinger middle band at 1.3560 would open the way toward the upper band resistance near 1.3660. Further north, the next hurdle to watch is the 1.3700 psychological level. 

On the downside, initial support is seen at the lower Bollinger Band around 1.3465, ahead of stronger structural backing from the 100-day SMA at 1.3445, where buyers would be expected to defend the broader upbeat tone.