GBP outlook as GBP/USD gets rejected from pre-FOMC highs

[Ben Graham]

The currency market had been dormant for a while, but this is now a theme of the past yet again.

Throughout August, a first move higher from the Pound got met with a subsequent consolidation until the beginning of this month .

GBP/USD peaked just above 1.37 on Wednesday’s announcement, but that rally didn’t stick — the pair now trades roughly 1.70% lower as the dollar staged a fierce comeback.

What flipped the script was a rapid unwind of pre-FOMC downbeat USD bets: Powell’s more balanced tone and a re-credibilized Federal Reserve re-anchored the dollar (the latter could still be a bearish theme for the USD in the future).

Recent exchanges between US President Trump and UK PM Keir Starmer have marked a strengthening of collaboration between the two countries that are on their own separating paths from their neighbors, and it would make sense for the two countries to get closer, looking forward.

In terms of data, with UK inflation still uncomfortably high (3.8% headline as the Bank of England targets 2%) and Governor Bailey still mentioning cuts on the table (more for 2026), Markets got a perfect setup for a rejection at those pre-FOMC highs.

The question now is whether this pullback is the start of a larger correction, and if this breakdown will also spread to other European currencies in the continuation of FX geographic trends.

Let’s break down the multi-timeframe levels for GBPUSD and where to look next.

Read More:

• Post-FOMC US dollar surge shifts global markets – DXY outlook
• Where to Next, EUR/USD? Policy gap between ECB and Fed
• Caution Over Speed: How the Fed Framed Its First Cut

GBPUSD Daily Chart

GBPUSD Daily Chart, September 19, 2025 – Source: TradingView

When looking at the higher timeframe, we spot that since reaching its 2025 highs in June, the pair really hasn't moved in a trend, which makes sense when looking at the immense movements in the first half of the year.

The two past candles are sending scary sights, but the 50-Day Moving Average (1.34650) may act as an intermediate bumper to slow the ongoing selling.

Breaching it and closing below offers a door for lower movement.

On the other hand, failing to breach the key MA could lead to further consolidation.

Let's take a closer look for intra-day trading levels.

GBPUSD 8H Chart and levels

GBPUSD 8H Chart, September 19, 2025 – Source: TradingView

Shorter timeframes offer another view of how steep the descent is.

With momentum getting closer to oversold, it will be interesting to see how participants move the major pair, and with the week coming to an end, it will surely be an answer for next week.

However, things to look for trading are: A continuation or lack thereof of the Dollar Index (check out our morning piece!) , a close below the 1.3450 (August range lows) to 1.35650 level and upcoming data (US GDP data and many Central bank speeches next week)

Levels to watch for the GBPUSD:

Resistance Levels

• 1.35 psychological level
• Resistance at the 1.36 zone
• Resistance 1.37 Zone
• pre-FOMC Highs 1.37288

Key Pivot Zone: 1.3450 to 1.3650

Support Levels

• 1.34 Psychological level
• Support 1.3260-1.33
• Support 1.3170 - 1.31850

GBPUSD 1H Chart

GBPUSD 1H Chart, September 19, 2025 – Source: TradingView

Looking closer, momentum starts to curb around the lows of the week which signals that oversold conditions might be kicking in.

Such preceding movement may impede a strong pullback, and consolidation may have the higher chance of allowing price action to then continue – Future data will then tell if the movement is more to an upside reversal or a downside continuation.

Safe Trades!

Follow Elior on Twitter/X for Additional Market News, interactions and Insights @EliorManier

Opinions are the authors'; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. The provided publication is for informational and educational purposes only.
If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please refer to the MarketPulse Terms of Use.
Visit https://www.marketpulse.com/ to find out more about the beat of the global markets.
© 2025 OANDA Business Information & Services Inc.