01.10.202605:06 Forex Analysis & Reviews: Overview of the GBP/USD Pair. October 1. The Economy Grew, the Dollar Fell

The GBP/USD currency pair unexpectedly rose with confidence on Wednesday for many. For the first time in several weeks, the market saw factors supporting the British pound rather than the dollar. The British currency's ascent began in the morning, when the UK's second-quarter GDP report came in higher than expected. Overnight, one of the Federal Reserve's FOMC members, John Williams, said the central bank could raise rates one more time and that there is no rush. Furthermore, the dollar was hit by the PCE index, which many FOMC members consider the most important and reliable inflation indicator. The core personal consumption expenditures price index for August did not change, although experts had forecast a rise to 3.7%. As a result, three events immediately put pressure on the US dollar. At the same time, the market ignored a strong US GDP report and a decent ADP US labor market print.

In principle, the US dollar could now begin a new prolonged decline, especially against the British pound. On the weekly TF, the pair once again fell to the important level of 1.3191, which can be considered the lower boundary of the sideways channel. Since price has failed to overcome it for the fourth time, the long-term flat persists. If so, one can now expect movement toward the upper boundary of the sideways channel. That is, at least to the 1.3650 level. And we note that for the pound to rise by 350 pips, no strong reasons will be needed either, because the market remains flat. We still do not believe that the dollar's rise in recent weeks was based on Fed monetary tightening. If that were the case, the dollar's rise was completely unfounded. And now the market will begin to bring the pair's rate to a fair value. And it is much higher than current levels.

We also recall that an uptrend began in 2022. After the correction ends, therefore, one should expect a resumption of the uptrend. So despite the dollar's repeated rises this year, we still believe it will fall in the long term. Since the pair remains flat visible on both the daily TF and the weekly TF, the fundamental backdrop does not carry the same weight now as it does in normal times. The market remains in a stage of forming new positions or distributing old ones. Thus, the direction of movement has already been chosen; it now only needs to wait to start. Since there are no long-term reasons to expect a dollar rise, the upward move will resume.

We also note that current price levels are extremely low, and the uptrend or sideways channel has not been invalidated. Therefore, current price values may look very attractive for long-term long positions.

The average volatility of the GBP/USD pair over the last 5 trading days is 61 pips. For the pound/dollar pair, this value is "average." On Thursday, October 1, therefore, we expect movement within the range bounded by levels 1.3196 and 1.3318. The higher linear regression channel is directed upward, indicating an uptrend. The CCI indicator has entered the oversold area twice, warning of a possible end to the downward trend.

Nearest support levels:

S1 - 1.3245

S2 - 1.3184

S3 - 1.3123

Nearest resistance levels:

R1 - 1.3306

R2 - 1.3367

R3 - 1.3428

Trade recommendations:

The GBP/USD currency pair continues its illogical downward movement. Donald Trump's policies will continue to put pressure on the US economy, so we do not expect the US dollar to rise in the long term. So far, 2026 has been positive for the dollar due to geopolitics and inflation, which forced capital to flee to safety and the Fed to return to monetary tightening. However, on the weekly TF, a flat range persists between 1.3150 and 1.3780 within a four-year uptrend, suggesting medium-term growth in the British currency. Consider long positions with targets of 1.3367 and 1.3428 when price is above the moving average. When price is below the moving average, you can trade bearish, targeting 1.3196 and 1.3184.

Explanations for the illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is currently strong.
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which trading should be conducted now.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) show the likely price channel the pair will trade in over the next 24 hours, based on current volatility indicators.
• The CCI indicator — entering the oversold area (below -250) or the overbought area (above +250) — signals an imminent trend reversal in the opposite direction.