GBP/USD Pressured Toward 1.35 After Weak UK Flash PMI

The British Pound is on shaky ground this week as disappointing PMI data adds pressure to an already fragile outlook. Both manufacturing and services slowed in September, raising fresh concerns over the UK economy and leaving GBP/USD vulnerable near the 1.35 handle.

Meanwhile, the GBP/USD pair remains stuck within a relatively same range. However, the strong momentum of the US Dollar (USD) is tilting the direction downward. This situation calls for greater caution among traders. The combination of disappointing UK fundamentals and the dominant strength of the USD could act as a catalyst for a more significant move in GBP/USD in the near term.

Figure 1. GBPUSD D1 Chart – Sept 24, 2025

Highlight Fundamental this Week

Flash Manufacturing PMI and Flash Services PMI

UK Flash PMI Results This Week

Impact on the UK Economy (Macro) & Risks

1. Slower economic growth
   With manufacturing contracting and services losing momentum, the UK’s growth outlook weakens. Businesses may become more cautious in investment and hiring.
2. Stagflation concerns
   If growth slows while inflation remains high, the UK faces stagflation risk (low growth + high inflation). This complicates monetary policy.
3. Bank of England (BoE) policy implications
   Weaker data may push the BoE to be more cautious on rate cuts. If the slowdown persists, policymakers may need to keep rates higher for longer, adding pressure to the economy.
4. Investor sentiment & government bonds
   Sluggish growth raises concerns over government revenue and debt. Yields on UK gilts, especially long-term ones, could rise as investors demand more risk.
5. Labour market & investment impact
   As activity slows, businesses may hold back on expansion or new hiring. Investment, particularly in manufacturing, could be delayed.

Technical Analysis

On the lower timeframes, we can see the market forming a clear structure that connects into a trendline. Currently, price is hovering around a key support area. If the US dollar continues to show strength against the pound, there’s a strong chance that the bearish momentum will extend further.

Figure 2. GBPUSD H4 Chart – Sept 24, 2025

But remember markets always offer two possibilities: price can either bounce or break. That’s why it’s important to prepare for both scenarios.

• Bullish scenario: If you’re looking to buy, it’s best to wait for stronger confirmation such as a bullish candlestick pattern or a break of market structure on the lower timeframe.
  
• Bearish scenario: For sellers, the safer entry would come if price breaks below the current support, retests it, and then continues the downward move.
  

Figure 3. GBPUSD H4 Chart – Sept 24, 2025

Figure 4. GBPUSD H4 Chart – Sept 24, 2025