The British pound moved up strongly on Monday even though there was no important news from the UK or the US. Normally the start of the week is calm, but this time traders reacted differently. The focus is now on the Federal Reserve meeting on Wednesday evening and the Bank of England meeting on Thursday. Both events could bring big moves, and the dollar is already under pressure.
Daily chart shows strength in the pound
In the first half of 2025, the pound showed a strong rise not seen in years. After that, the price pulled back for less than a month, testing the Senkou Span B line and the 38.2 percent Fibonacci retracement. These levels gave strong signals that the uptrend was still alive. Soon after, the price broke above all Ichimoku lines, which confirmed the trend continuation.
Dollar faces pressure from Fed policy and politics
The dollar was already weak when the Fed kept interest rates steady and the Bank of England cut. If the Fed cuts rates while the Bank of England holds steady, the dollar may fall further. Uncertainty also comes from Donald Trump, who is pushing for much lower rates. If he reshapes the Fed, rates could drop close to one percent. If not, the dollar may fall at a slower pace, but pressure remains.
Inflation gives support to the pound
Inflation in the UK has reached 3.8 percent, which is double compared to a year ago. This rise started long before new US trade policies, so it is part of a lasting trend. If data shows inflation rising again, the Bank of England will not rush to cut rates. This creates more room for the pound to stay strong while the dollar struggles.
Expected range and trend signals
The GBP/USD pair has shown an average daily move of 69 pips over the past five days. On September 16, the price is expected to trade between 1.3537 and 1.3675. The upper band of the linear regression channel points upward, confirming the bullish trend. The CCI indicator has also dipped into oversold levels, hinting at a possible continuation of the upward move.
Support and resistance levels
Support is at 1.3550, 1.3489, and 1.3428. Resistance is at 1.3611, 1.3672, and 1.3733. As long as the price stays above the moving average, long positions toward 1.3611 and 1.3672 remain relevant. If the price moves below the moving average, small short trades could be considered, but the larger trend remains upward.
Important chart tools
Linear regression channels help confirm the trend direction. The moving average line shows short term trend signals. Murray levels mark possible target points for moves. Volatility lines show the price range for the next day. The CCI indicator warns when a trend may reverse if the values go too high or too low.
