GBP/USD Braces for Breakout as Fed and UK CPI Draw Near

Key Highlights

• GBP/USD attempted a fresh increase and tested the 1.3460 resistance.
• A key contracting triangle is forming with resistance at 1.3450 on the 4-hour chart.
• The UK Core CPI could increase 2.7% in May 2026 (YoY).
• The Fed might keep interest rates unchanged from 3.75%.

GBP/USD Technical Analysis

The British Pound found support near 1.3320 against the US Dollar. GBP/USD climbed above 1.3400 and 1.3420 before it faced hurdles.

Looking at the 4-hour chart, the pair traded above the 100 simple moving average (red, 4-hour) but failed to surpass 1.3460 and the 200 simple moving average (green, 4-hour). There is also a key contracting triangle forming with resistance at 1.3450.

To continue higher, the pair must settle above the triangle resistance and the 200 simple moving average (green, 4-hour). The next major resistance might be 1.3500.

A close above 1.3500 could open the doors for a larger increase. In the stated case, GBP/USD might rise toward 1.3600 or even 1.3650. If there is a fresh pullback, the bulls might remain active near the 50% Fib retracement level of the upward move from the 1.3324 swing low to the 1.3461 high at 1.3390.

The first major support might be near 1.3355. A close below 1.3355 could push the pair into a bearish zone. The main support could be near 1.3300. Any more losses might set the pace for a test of 1.3200.

Looking at EUR/USD, the pair started a recovery wave above 1.1575 but faces many hurdles near 1.1625 and 1.1650.

Upcoming Key Economic Events:

• UK Consumer Price Index for May 2026 (YoY) – Forecast +2.9%, versus +2.8% previous.
• UK Core Consumer Price Index for May 2026 (YoY) – Forecast +2.7%, versus +2.5% previous.
• US Retail Sales for May 2026 (MoM) – Forecast +0.5%, versus +0.5% previous.
• Fed Interest Rate Decision – Forecast 3.75%, versus 3.75% previous.