British Pound remains depressed vs USD ahead of UK Autumn Budget and FOMC on Wednesday

• GBP/USD edges higher on Tuesday, though it lacks bullish conviction ahead of key event risks.
• The UK Autumn Budget will be published on Wednesday ahead of the crucial FOMC decision.
• The US Q3 GDP and the PCE Price Index will contribute to providing a fresh impetus to the pair.

The GBP/USD pair remains depressed below mid-1.3300s during the Asian session on Tuesday, though it holds above the previous day’s swing low. The downside, however, seems cushioned as traders seem hesitant to place aggressive bets ahead of this week's key event risks.

UK Chancellor John Healey will deliver his first Autumn Budget on Wednesday and is expected to prioritize stability in the bond market in the wake of Prime Minister Andy Burnham's big spending plans. Market participants will be closely watching proposed public spending and additional funding plans to see how they will be financed without triggering a negative gilt market reaction. This, in turn, will play a key role in driving the British Pound (GBP) and provide some meaningful impetus to the GBP/USD pair.

Investors will also monitor the US Federal Reserve's (Fed) decision on Wednesday amid the growing acceptance that the central bank will hold interest rates steady. Hence, the focus will be on the accompanying policy statement and Fed Chair Kevin Warsh's comments during the post-meeting press conference, which will be scrutinized for more cues about the future policy path in the absence of updated economic forecasts. The outlook, in turn, will influence the US Dollar (USD) and the GBP/USD pair.

Apart from this, traders this week will confront the release of important US macro data – the Advance Q3 GDP growth report and the Personal Consumption Expenditures (PCE) Price Index on Thursday. In the meantime, bets that the US central bank will raise borrowing costs again in December, along with geopolitical uncertainties, continue to act as a tailwind for the USD. However, expectations of tighter monetary policy from the Bank of England (BoE) should limit the downside for the GBP/USD pair.

GBP/USD daily chart

Technical Analysis

The GBP/USD pair remains capped beneath the 100-day Simple Moving Average (SMA) at 1.3389 and a dense Fibonacci band overhead. Spot prices currently trade just under the 38.2% retracement at 1.3344, suggesting rallies are vulnerable while the broader recovery off the 1.3141 cycle low struggles to clear medium-term resistance.

The next relevant hurdle above the 100-day SMA is located near the 50.0% retracement at 1.3407, with further barriers at 1.3470 (61.8%) and 1.3559 (78.6%), ahead of the 1.3673 swing high. On the downside, initial support is seen at the 23.6% retracement at 1.3267, with a deeper structural floor at the 1.3141 cycle low, where stronger buying interest would be expected on a sharper pullback.

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