GBP/USD Weekly Outlook — April 7-11, 2026

Last Week in Cable

GBP/USD — still called "cable" by traders who enjoy vintage nicknames — ended the week at 1.2634 after a relatively calm five sessions. The pair spent most of the week between 1.2580 and 1.2670, with neither bulls nor bears able to claim a decisive victory.

Sterling's resilience stands out when you zoom out. Despite a string of mixed UK data over the past month, the pound has held above 1.2500 and gradually carved out a higher low structure. Part of this is dollar weakness, sure. But the UK economy is showing more life than the doom-and-gloom crowd predicted — services PMI came in at 53.1, comfortably in expansion territory.

BoE Rate Outlook

The Bank of England remains the trickiest central bank to read right now. Inflation has been stickier in the UK than in the US or eurozone — core CPI still sits at 3.4% year-over-year, well above the 2% target. That's kept the BoE cautious about cutting rates, even as the housing market shows signs of stress.

Markets are pricing roughly 50 basis points of cuts through the rest of 2026, with the first move expected in June. Governor Bailey's recent comments have been deliberately vague — acknowledging "encouraging progress on inflation" while emphasizing that the job isn't done. Classic central banker hedging.

Compared to the Fed and ECB, the BoE's relatively hawkish stance is a mild positive for sterling. If UK inflation continues to cool as expected, rate cuts will come — but the slow pace gives GBP carry support in the meantime.

Week Ahead Events

Tuesday brings UK employment data, where the unemployment rate is expected to hold at 4.0% and average earnings growth to moderate slightly. The wage data matters more than the headline — any surprise to the upside reinforces the BoE's patience on cuts.

Wednesday is all about US CPI — the biggest data point of the week globally. A hot print would strengthen the dollar across the board and push cable back toward 1.2500. A soft print could be the catalyst for a breakout above 1.2670.

Thursday sees UK GDP data for February, with expectations for a 0.1% month-over-month print. Not exciting, but anything negative would revive recession worries. Friday's US consumer sentiment survey rounds out the week.

Technical Analysis

GBP/USD is painting a textbook pennant pattern on the daily chart, with converging trendlines meeting around the current price level. This is a continuation pattern that typically resolves in the direction of the prior trend — which was up.

The 50-day moving average sits at 1.2610 and has been a reliable dynamic support, with the pair bouncing off it three times since February. The 200-day MA is further below at 1.2480, providing a safety net if things deteriorate.

On the 4-hour timeframe, the RSI is neutral at 50, perfectly balanced. The ADX (Average Directional Index) has dropped to 18, signaling a trendless, coiling market. When ADX drops this low and then turns up, it often marks the start of a new directional move.

Fibonacci levels from the March rally (1.2450 to 1.2720) place the 38.2% retracement at 1.2617 and the 50% at 1.2585 — both are now acting as support layers.

Our Bias: Neutral with Bullish Lean

We're sitting on the fence for cable this week, tilted slightly to the upside. The pennant formation and higher low structure are encouraging, and the BoE's relative hawkishness supports sterling. But the US CPI print on Wednesday is a coin flip that could move the pair 80-100 pips in either direction.

If forced to pick, we'd look for a long entry on any dip toward 1.2580-1.2600, with a stop below 1.2540 and a target at 1.2720. But we'd be flat going into the CPI release unless the setup is too good to ignore.

Key levels to watch: 1.2580-1.2600 support | 1.2670 immediate resistance | 1.2720 breakout target.