GBP/USD technical outlook remains strong, market remains cautious ahead of PCE release

Asian Market Performance Remains Steady

On Friday during the Asian trading session, GBP/USD traded steadily around 1.3330, with a relatively restrained trading direction. Market participants generally adopted a wait-and-see stance, awaiting the release of US PCE inflation data. This delayed September Personal Consumption Expenditures Price Index report is expected to be released later on Friday and could serve as a key catalyst influencing the subsequent direction of the dollar.

Central Bank Expectations Drive Dollar Under Pressure

According to the latest statistics from CME FedWatch Tool, the market’s pricing for a Fed rate cut in December has risen to an 89% probability, up from 63% a month ago. This shift in expectations is weakening the attractiveness of the dollar, creating upward space for major currency pairs like GBP/USD.

Meanwhile, the Bank of England also faces easing pressures. The market expects the BOE to cut interest rates to 3.75% in December, with a pricing probability as high as 90%. This mismatch in dovish expectations between the two central banks has become a significant variable influencing the recent performance of GBP/USD.

Technical Outlook Remains Constructive

On the daily chart, GBP/USD is trading around 1.3328, remaining above the 100-day moving average. As the moving averages flatten and turn favorable, the price has gained strong technical support. The upper Bollinger Band is near 1.3348, with increased volatility indicating rising market fluctuations. The RSI stands at 61, reflecting positive momentum without being overextended.

Resistance is concentrated at the 1.3348 level; a break above this could extend the rally. The key support level is the 100-day moving average at 1.3300, with the middle and lower bands at 1.3189 and 1.3029 providing further buffers. As long as the price remains above the moving averages, the bullish bias remains intact.

PCE Release Timing and Subsequent Focus

The timing of the PCE data release will directly determine the short-term direction of the dollar. An unexpectedly strong report could trigger a rebound, while a below-forecast figure would favor further easing. Traders should closely monitor market reactions post-release, as the PCE results will serve as an important reference for future movements.