GBP/USD, Gold Forecast: Two trades to watch

GBP/USD falls for a third day despite stronger GDP data

GBP/USD remains depressed amid a stronger U.S. dollar, despite upbeat UK GDP figures.

UK GDP rose 0.7% quarter on quarter in Q3, in line with expectations, marking the strongest growth since early 2024. This was also up from 0.5% in Q2. On a monthly basis, GDP rose 0.2% in September, ahead of the 0% growth forecast.

Strong growth has defied predictions of a slowdown since the Iran war started, boosted by spending related to the adoption of AI.

Households have shown little sign of tightening their belts despite the inflationary shock.

The pickup in growth increases pressure on the Bank of England to raise interest rates after hiking this month for the first time in three years. The market is pricing in an 80% chance of another rate hike in December, with three hikes expected by September next year.

While the Bank of England forecasts inflation at 5% next year, it is also worth noting that oil prices have fallen sharply, with Brent down 22% over November so far. This could help inflationary pressures ease in the second half of 2027.

The other part of the equation is U.S. dollar strength, with the dollar rising to its highest level against its major peers in 19 months. This comes as expectations for further Fed rate hikes increase following hotter inflation and hawkish Fed commentary. U.S. jobless claims and Fed speakers are in focus today.

GBP/USD forecast – technical analysis

After hitting resistance at 1.35, GBP/USD reversed lower, breaking below the rising channel and its 200 and 50 EMAs to 1.3260 at the time of writing. The breakdown of these key technical levels, combined with the RSI below 50, keeps sellers hopeful of further downside.

Immediate support is seen around the 1.3200 zone, which has provided a floor for the pair on several occasions this year. A sustained break below this support would bring 1.3100 into focus, followed by 1.30, the November 2025 low.

On the upside, buyers would first need to reclaim 1.3300 to ease the immediate selling pressure. Above here, attention turns to the 50 EMA at 1.3365, followed by the 200 EMA at 1.3390. A sustained move above these levels would turn the technical outlook more constructive, bringing 1.35 back into focus. A break above this level would establish a fresh higher high and signal a potential reversal in the broader trend.

Gold falls as dollar gains on Fed rate hike expectations

Gold is falling for a third straight day on Thursday, dropping below 3,960 support amid recent U.S. dollar strength and firming Federal Reserve rate hike expectations.

U.S. inflation data this week was hotter than expected, which, combined with hawkish commentary from Federal Reserve policymakers, has affirmed market expectations that the Fed will hike rates in December.

Adding to this, traders have also started pricing in the possibility of an outsized 50-basis-point rate hike next month.

This outlook has pushed the yield on the 10-year Treasury back to the 5% threshold, acting as a tailwind for the greenback while raising the opportunity cost of holding the precious metal.

The U.S. Dollar Index trades at its highest level since April 2025, taking the shine off U.S. dollar-denominated gold.

Attention will now turn to jobless claims, which are expected to remain low at 195,000, as well as speeches from U.S. Fed officials, including Hammack and Daly. U.S. PPI data is due tomorrow.

Low jobless claims, hot inflation and hawkish commentary from Fed speakers could see gold fall further.

Gold forecast- technical analysis

Gold trades below its 50 and 200 EMAs in a bearish trend. The price recently recovered from the 3,875 low but faced rejection at the 50 EMA, reinforcing the bearish bias, before breaking below support at 3,960, the July low.

Sellers, supported by the RSI below 50, will look towards 3,875 support. A break below here would create a lower low, turning attention to 3,800, with 3,700 the next logical target.

Any recovery would need to rise above 3,960 to turn attention back towards 4,100 and the 50 EMA at 4,140. A rise above here would create a more stable footing, turning attention to 4,200 and the 200 EMA at 4,255.