The British pound fluctuated at a high level after breaking through 1.36, awaiting the Fed's major decision to determine the outcome.
2025-09-16 09:25:14
GBP/USD was trading sideways in early Asian trading on Tuesday (September 16th), following a sharp rise in the previous session, breaking through the 1.3600 mark for the first time since July. The pair subsequently retreated slightly, now hovering around the 1.3600 mark. The most crucial factor was the broad-based weakness of the US dollar at the start of the week, as the market prepared for the Federal Reserve's upcoming key interest rate decision.
Traders will be closely watching whether the Federal Reserve meets or exceeds market expectations for rate cuts for the rest of the year. The Fed's rate decision on September 17th (local time, September 18th, Beijing time) will also include the release of the highly anticipated Summary of Economic Projections (SEP), the "dot plot" that reflects policymakers' interest rate expectations.
According to CME's FedWatch tool, the market generally expects the Federal Reserve to implement three interest rate cuts before the end of the year, and the interest rate market is betting that the probability of the Fed cutting interest rates by 75 basis points before January is close to 75%.
The Bank of England is expected to remain on hold and inflation data is unlikely to cause any significant fluctuations
The Bank of England will also announce its interest rate decision on Thursday, but predictions suggest it will likely maintain current rates for now by a 7-2 vote. UK Consumer Price Index (CPI) inflation data, due on Wednesday, is expected to show a slight acceleration in inflationary pressures, with the annualized CPI expected to rise by 3.9% year-on-year, up from 3.8% in the previous month. Core CPI inflation is expected to edge down from 3.8% to 3.6% over the same period.
US retail sales data for August will be released on Tuesday, but with markets closely watching the Federal Reserve's interest rate decision on Wednesday, the overall impact is likely to be limited, with the monthly rate expected to slow from 0.5% to 0.3%. While the market reaction may be relatively muted, the decline in retail sales data will be another negative signal, alongside the weakening job market and persistent inflation, amidst growing recession concerns.
Technical Analysis
The trend line of GBP/USD forms a triangle convergence pattern, indicating that market sentiment tends to wait and see. In the short term, the volatility of the currency pair may decrease, and it may go sideways in the short term.
In addition, the 14-day relative strength index (RSI) is around 60, and the pound sterling may be in a volatile and strengthening pattern against the US dollar, and the subsequent exchange rate may be mainly in a volatile and strengthening pattern.
On the downside, the initial support area is formed between the 20-day exponential moving average (EMA, 1.3517) and the 50-day exponential moving average (1.3483), and the strong support area is formed between the 200-day exponential moving average (3231) and the low of 1.3140 in the past three months.
On the upside, Monday's high of 1.3619 constitutes an initial strong resistance level. If this resistance level is effectively broken, the bullish trend may be further strengthened, and there is a possibility of continuing to test the early July high of 1.3788.
(GBP/USD daily chart, source: Yihuitong)
At 9:24 Beijing time, the pound sterling was trading at 1.3599/1.3600 against the US dollar.
Traders will be closely watching whether the Federal Reserve meets or exceeds market expectations for rate cuts for the rest of the year. The Fed's rate decision on September 17th (local time, September 18th, Beijing time) will also include the release of the highly anticipated Summary of Economic Projections (SEP), the "dot plot" that reflects policymakers' interest rate expectations.
According to CME's FedWatch tool, the market generally expects the Federal Reserve to implement three interest rate cuts before the end of the year, and the interest rate market is betting that the probability of the Fed cutting interest rates by 75 basis points before January is close to 75%.
The Bank of England is expected to remain on hold and inflation data is unlikely to cause any significant fluctuations
The Bank of England will also announce its interest rate decision on Thursday, but predictions suggest it will likely maintain current rates for now by a 7-2 vote. UK Consumer Price Index (CPI) inflation data, due on Wednesday, is expected to show a slight acceleration in inflationary pressures, with the annualized CPI expected to rise by 3.9% year-on-year, up from 3.8% in the previous month. Core CPI inflation is expected to edge down from 3.8% to 3.6% over the same period.
US retail sales data for August will be released on Tuesday, but with markets closely watching the Federal Reserve's interest rate decision on Wednesday, the overall impact is likely to be limited, with the monthly rate expected to slow from 0.5% to 0.3%. While the market reaction may be relatively muted, the decline in retail sales data will be another negative signal, alongside the weakening job market and persistent inflation, amidst growing recession concerns.
Technical Analysis
The trend line of GBP/USD forms a triangle convergence pattern, indicating that market sentiment tends to wait and see. In the short term, the volatility of the currency pair may decrease, and it may go sideways in the short term.
In addition, the 14-day relative strength index (RSI) is around 60, and the pound sterling may be in a volatile and strengthening pattern against the US dollar, and the subsequent exchange rate may be mainly in a volatile and strengthening pattern.
On the downside, the initial support area is formed between the 20-day exponential moving average (EMA, 1.3517) and the 50-day exponential moving average (1.3483), and the strong support area is formed between the 200-day exponential moving average (3231) and the low of 1.3140 in the past three months.
On the upside, Monday's high of 1.3619 constitutes an initial strong resistance level. If this resistance level is effectively broken, the bullish trend may be further strengthened, and there is a possibility of continuing to test the early July high of 1.3788.
(GBP/USD daily chart, source: Yihuitong)
At 9:24 Beijing time, the pound sterling was trading at 1.3599/1.3600 against the US dollar.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
