British Pound holds firm as USD rebounds from intervention rout

• GBP/USD holds near 1.3460 as Dollar recovers from intervention-led slide.
• UoM sentiment improves while inflation expectations remain stubbornly elevated.
• Fed dissenters defend hikes as BoE keeps tightening door open.

The Pound Sterling retreats some 0.02% on Friday as the Greenback stages a recovery following Thursday’s intervention day, which weakened the US Dollar Index (DXY) to a 30-day low. At the time of writing, the GBP/USD trades at 1.3458, virtually unchanged.

GBP/USD steadies as improved US sentiment, Fed dissents and BoE tightening risks keep traders cautious

The US Dollar is headed for one of its worst weeks since the first week of April 2026, poised to finish with losses of over 1.30%. Recently, US economic data revealed that Consumer Sentiment improved, according to the University of Michigan (UoM). The index improved from its preliminary reading of 54.4 to 55.2, while inflation expectations remained unchanged at 4.2% for one year and 3.3% for five years.

Joanne Hsu, the Director of the Survey of Consumers, wrote, “Broad-based improvements were seen across all groups by income, education, wealth, age, and political party.”

In the meantime, the recent economic data in the US showed that the economy grew at a slower pace than expected in the second quarter. Also, the Fed’s preferred inflation gauge, the Core PCE, fell 0..1% in June. This, along with Fed Chair Kevin Warsh's lack of forward guidance, trimmed the chances of a September rate hike, as markets expect just 23 basis points of tightening towards the end of the year.

In the meantime, the three Fed dissenters who voted for a rate hike expressed their views on their decisions. Dallas Fed Lorie Logan said the inflation risk is tilted upward and that she would’ve preferred a hike to better balance the risk outlook.

Beth Hammack of the Cleveland Fed said that the policy rate is not restrictive enough, and that inflation jas been “too high for too long.” Finally, the Minneapolis Fed's Neel Kashkari said he preferred to raise rates by 25 basis points, as he favours a gradual approach to monetary policy rather than “bolder actions.”

In the UK, the BoE held rates unchanged, though it left the door open to monetary policy rate hikes due to uncertainty over the US-Iran conflict. Nevertheless, money markets still expect a 25-basis-point rate hike by the end of the year, according to Prime Terminal data.

Worth noting that Sterling’s fate lies with the new PM Andy Burnham, as investors remained concerned about the fiscal health of the economy.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3469, keeping a constructive bullish bias as spot holds above the clustered simple moving average around 1.3365 and the former descending trend line, whose latest reacted close at 1.3375 now acts as underlying support. The Relative Strength Index (14) hovers near 59, suggesting firm but not overextended upside momentum, while the broader uptrend support line, last touched near 1.3289, reinforces a pattern of higher daily lows.

On the downside, initial support emerges at the recent pivot area around 1.3469, with the former resistance trend line turned floor near 1.3375 and the nearby simple moving average at 1.3365 forming the next demand band, ahead of the rising trend-line base around 1.3289. With no notable resistance levels immediately overhead in this dataset, the pair would likely maintain its bullish tone as long as it defends the 1.3375–1.3365 region, while a break beneath the 1.3289 trend support would hint at a deeper corrective phase.

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