Buying GBPUSD on weaker US dollar and potentially positive UK data

Given current conditions in the forex market, the pair of the British pound against the US dollar may show strong performance on October 16–17. Technical indicators and trader expectations underpin this scenario, despite observed domestic economic risks. Earlier this week, GBPUSD gained moderate bullish momentum ahead of the UK inflation data release and as prospects for UK fiscal policy became clearer.

Positive economic statistics are now supporting the pound’s rise. Even stronger upward momentum could emerge if inflation data improve or fiscal policy stabilizes. Meanwhile, the US dollar may decline significantly over the next two days due to increasing expectations of rate cuts by the Federal Reserve (Fed). Fundamental factors also point to the greenback weakening in the long run. As traders search for higher-yielding assets, the American currency is losing its appeal ahead of a predicted 25-basis-point rate cut at the next meeting and another one in December. Morgan Stanley’s research, conducted in August 2025, showed that the dollar lost 11% in the first half of this year, the biggest slump in over 50 years. Analysts believe the greenback could fall another 10% by the end of 2026.

Technically, the dollar index (DXY) is currently trending downward. So, the GBPUSD pair is poised to advance by the end of the week, based on the combination of factors mentioned above.

The overall recommendation is to buy GBPUSD. Profits should be taken at the level of 1.35850. Stop Loss could be set at 1.33250.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.