At the start of the new week, the GBP/USD pair is attempting to attract buyers after a prolonged decline, trading above the psychological level of 1.3100. However, fundamental factors clearly tilt the market toward a bearish outlook and confirm the likelihood of a continuation of the downward trend that has persisted for about a month and a half.

The U.S. dollar remains firm near a three-month high after Fed Chair Jerome Powell adopted a decisively hawkish tone last week. This remains the key factor weighing on GBP/USD. In addition, Powell dismissed market expectations for a 25-basis-point rate cut in December, helping offset concerns about an economic slowdown amid the ongoing prolonged U.S. government shutdown and thereby supporting the dollar.

The British pound, meanwhile, continues to show weak performance due to growing concerns about fiscal risks in the U.K. ahead of the main Autumn Budget, which will be presented by Chancellor Rachel Reeves on November 26. Furthermore, rising expectations of a possible Bank of England rate cut reinforce the negative sentiment surrounding GBP/USD. However, for a more accurate forecast, it is reasonable to wait for the BoE meeting results and an update on monetary policy this Thursday before preparing for the next stage of directional movement.

The probability of a 25-basis-point rate cut on November 6 is estimated at about 33% (one in three), while the chances of a rate cut before the end of the year stand around 68%. This outlook is driven by declining inflationary pressure and fiscal measures that create preconditions for further monetary easing. Moreover, slower wage growth and a rising unemployment rate have again increased the likelihood of an imminent rate reduction.

In addition, negative oscillators on the daily chart, last week's break below the 200-day Simple Moving Average (SMA), and continued declines all indicate that the path of least resistance for GBP/USD remains downward.

The pair faces immediate resistance near 1.3150, while support lies just above the psychological 1.3100 mark, around 1.3115. It's also worth noting that the Relative Strength Index (RSI) on the daily chart is approaching oversold territory, suggesting a potential short-term corrective rebound.

Below is a table showing the U.S. dollar's performance against major currencies over the past seven days. During this period, the dollar showed the greatest strength against the British pound.