GBP/USD Price Forecast: Softens to near 1.3200, staying bearish under 100-day SMA

The GBP/USD currency pair experienced a decline to approximately 1.3200 during Friday's early European session. The British Pound (GBP) weakened against the US Dollar (USD) due to rising fiscal concerns in the UK ahead of the upcoming budget. According to the UK Office for National Statistics, public sector borrowing in August reached £18.27 billion, surpassing forecasts.

This significant increase in borrowing has put pressure on Chancellor John Healey to make tough decisions about taxes or spending cuts during the next budget. The Bank of England (BoE) is likely to raise interest rates by November and December, as indicated by market expectations. Analysts from Scotiabank highlight that the Pound is weaker compared to its peers, and the Bank of England's policy messaging is a crucial factor.

The GBP/USD pair is currently trading below the 20-day Bollinger middle band and the 100-day simple moving average (SMA), indicating a bearish near-term outlook. The next resistance level is at the 20-day Bollinger lower band (1.3215), followed by the July 28 low (1.3273), the 100-day SMA (1.3425), and the Bollinger middle band (1.3438).

Support is found at the June 24 low (1.3140), with potential downward trends leading to even lower levels if the price breaches these key support areas.