GBPUSD is up 11.78% from the dip in January. The upward trend remained active until late July, but momentum loss since then is clear. The forex market is now entering a key stage where Federal Reserve policy change on rate cuts will become more evident. First, the FOMC minutes on Wednesday, followed by Powell’s Jackson Hole speech, could provide new information about possible policy changes ahead of the September meeting, where economic forecasts will be reviewed. 

The effect of tariffs on the economy has become more visible, but the strength of the impact is still uncertain. PPI and import price index data showed that tariff effects begin to appear in the data with a lag. So far, the impact on consumers has remained limited, but over time, US companies are likely to pass some of the inflationary pressure on to consumers. While tariff-driven inflation will most likely have only a temporary effect, the Federal Reserve must ensure it remains temporary and does not become entrenched. The bigger problem is the signals of weakness in the jobs market. There will be PCE, CPI, and payrolls data before the September meeting, so Powell might not want to commit to any decision before seeing this data on Friday, which could be interpreted as hawkish by the market. On the other hand, Powell may want to leave the door open to a rate cut to limit the market reaction to his speech. As for the FOMC minutes, they will likely have only a small impact on volatility, similar to the previous minutes in recent years, but the two dissidents could provide a surprise. 

(UK Monthly Payrolls Change) 

In the United Kingdom, the situation is more complicated. Since last August, the economy has lost nearly 164,000 jobs, with only one month showing a small gain. This is the reason the Bank of England is cutting rates, but now inflation has started to pick up again. The BOE is likely to wait and observe the effects of recent rate cuts, but if job losses continue for several more months, the central bank will face much greater challenges. This could weigh on the British pound. 

(GBPUSD) 

From a technical perspective, GBPUSD is trying to hold above the 50-day moving average. This average has been a key support since February, and when it broke for the first time in July, it signaled weakness for the first time this year. After that, the uptrend collapsed in late July. GBPUSD is now retesting the broken trend and attempting to reenter it by finding support at the moving average. However, if this test fails and the average is lost, downward pressure is likely to increase again. In that case, the 1.3390 support level will be crucial, as it could provide the final and more concrete signal of a trend change.