GBP/USD Price Forecast: Extends recovery to near 1.3300 ahead of Fed Warsh’s speech

• GBP/USD recovers further to near 1.3285 amid weakness in the US Dollar.
• The US Dollar is expected to face high volatility following remarks from Fed Chair Warsh in a fireside chat.
• BoE’s Bailey rules out fears that energy shocks being started passing into wages and broader consumer prices.

The British Pound (GBP) is marginally higher to near 1.3285 against the US Dollar (USD) in the Asian trade on Friday, extending its Thursday’s strong recovery move. The GBP/USD pair has bounced back sharply from its fresh 10-month low of 1.3137 posted on Wednesday at the expense of the US Dollar.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, holds onto previous day’s losses at around 101.90.

During the day, the next move in the US Dollar is expected to be guided by comments from Federal Reserve (Fed) Chair Kevin Warsh on the US economy and inflation at the Fireside Chat with International Monetary Fund (IMF) Managing Director Kristalina Georgieva, which is schedule at 03:30 GMT.

On the British Pound front, Bank of England (BoE) Governor Andrew Bailey, like other members, has ruled out fears of second-round inflation effects emerging in the current scenario. However, Bailey warned that prices pressures are above-target and are “enormously frustrating”.

Bailey frustration on UK inflation keeps GBP under cautious support

FXS Speechtracker scores the speech at 6.2/10, slightly below Governor Bailey’s historic 6.4/10 baseline, pointing to a mildly softer impact than usual despite clear concern over above-target UK inflation. The emphasis that second-round effects are still “too early” to judge but currently “subdued,” with businesses focused on cost cutting, leans modestly dovish at the margin, tempering expectations for aggressive near-term tightening and limiting upside for GBP.

Bailey’s remark that the UK economy is “more resilient than we expected, not as strong as we need” reinforces a cautious stance, suggesting the Bank of England will balance inflation frustration against growth risks. The comment that Middle East news is the biggest factor moving UK gilt yields highlights external risk premia rather than a strong policy-driven repricing, leaving GBP supported by lingering inflation concerns but vulnerable to swings in global risk sentiment.

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3282, holding marginally above the 20-day exponential moving average (EMA) at 1.3277, which now acts as immediate trend support and hints at a cautiously constructive near-term tone as the pair attempts to stabilize after its recent slide. The Relative Strength Index (RSI) at 47.99 remains below the neutral 50 line, suggesting that bullish momentum is still tentative and that further gains would likely require a clearer improvement in demand.

On the upside, the 20-day EMA at 1.3277 is acting as a dynamic barrier for the pair. Above the 20-day EMA, the September 30 high at 1.3311 seems to be the key barrier. Looking down, the 10-month low of 1.3137 is the major support level. The pair would be exposed to 1.3100 if it fails to hold 1.3137.

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