GBP/USD Forecast: Cable Under Pressure Near 1.3430 as Markets Brace for US CPI

The British Pound remains under heavy selling pressure, hovering just above a multi-week low near 1.3430 on Tuesday, as investors await the highly anticipated US Consumer Price Index (CPI) data. The near-term outlook for GBP/USD appears tilted to the downside amid a stronger US Dollar and weaker UK macro data.

Technical Analysis: GBP/USD Clings to Support Within Bearish Territory

At the time of writing, GBP/USD trades around 1.3435, consolidating after a dip to a three-week low during the Asian session. On the 4-hour chart, the pair is flirting with the lower boundary of an ascending channel, which coincides with the 23.6% Fibonacci retracement level near 1.3540.

A break below 1.3540 may accelerate selling, exposing the 50-day Simple Moving Average (SMA) near 1.3500.
Further downside could bring 1.3465 into play, marking the 50% Fibonacci retracement level from the latest bullish swing.
On the upside, resistance is likely at 1.3570 (200-period SMA), followed by 1.3620 and 1.3700.

The Relative Strength Index (RSI) has drifted below the 50-neutral line, suggesting weakening bullish momentum and increasing downside risk.

Fundamental Outlook: US Tariff Shock and UK GDP Weakness Favor USD Strength

The fundamental backdrop also leans bearish for the Pound. On Thursday, the US Dollar gained momentum after Initial Jobless Claims came in better than expected. Later, US President Donald Trump’s announcement of sweeping tariff measures—including a 35% duty on Canadian imports and 15-20% on others—spurred risk aversion, boosting the greenback further.

Meanwhile, recent UK economic data added to the pressure on Sterling. The UK’s GDP fell by 0.1% in May, following a 0.3% contraction in April—well below market expectations for modest growth. The weak economic activity reinforces the view that the Bank of England may remain cautious, limiting the Pound’s upside potential.

Upcoming Data to Watch

Markets are now focused on the June US CPI report, due later today. A stronger-than-expected print may further bolster the case for the Federal Reserve to maintain higher interest rates, strengthening the Dollar and dragging GBP/USD lower.

UK inflation data is also on deck, with expectations for CPI to hold steady at 3.4% year-on-year. Any surprises could trigger volatility in the pair.

Key Events Ahead:

Time (GMT)	Event	Forecast
06:00	UK CPI (YoY)	3.4%
08:00	Eurozone CPI (YoY)	1.7%
20:30	US API Crude Oil Stocks	-2.0M
23:45	Fed’s Logan Speech	—

Conclusion: Downside Risks Loom Large for GBP/USD

With bearish technical signals and a fundamental backdrop favoring the US Dollar, GBP/USD may continue to struggle below key resistance levels. Traders should watch for a decisive break below 1.3430, which could open the door for deeper losses toward 1.3400 and below, especially if US inflation data surprises to the upside.

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Yasher Rizwan