By RoboForex Analytical Department
The GBP/USD pair climbed to 1.3355 on Thursday as markets braced for today’s Bank of England (BoE) meeting. Traders are closely watching two key factors: the voting split among Monetary Policy Committee (MPC) members and any signals regarding future rate moves.
The central bank is widely expected to cut interest rates by 25 basis points (bps) to 4.00%. However, there is speculation that some members, such as Swati Dingra or Alan Taylor, could push for a more aggressive 50 bps reduction, as seen in May. Should this occur, particularly if accompanied by a shift away from the BoE’s usual cautious tone, the pound could come under significant selling pressure.
Currently, markets have largely priced in a quarter-point cut. Yet, uncertainty remains around the future path of interest rates. While UK inflation remains elevated at 3.6%, well above the 2% target, the economy is weakening, and the labour market is showing signs of strain.
The baseline scenario suggests the BoE will maintain a gradual, data-dependent approach, with potential quarterly cuts. However, any deviation, such as a more aggressive voting split or dovish guidance, could significantly shift market sentiment.
Technical Analysis: GBP/USD
H4 Chart:
The GBP/USD pair has retraced to 1.3366 in a technical correction. A fifth downward wave towards 1.2942 is likely, potentially followed by a corrective rebound to 1.3366. This outlook is supported by the MACD indicator, with its signal line hovering near zero, signalling that downside momentum may soon resume.
H1 Chart:
A corrective wave is forming following the recent decline. The pair is currently consolidating around 1.3273 –a break above this range could see a push towards 1.3377. However, upon reaching this area, a fresh decline towards 1.3160 is anticipated. A breakdown below this would open the path to 1.2942. This bearish scenario is supported by the Stochastic oscillator, with the signal line below 80 and trending sharply down towards 20.
Conclusion
The pound remains vulnerable ahead of the BoE’s decision, with risks skewed towards further weakness if the central bank adopts a more dovish stance. Technically, the setup points to a resumption of the downtrend, with key levels at 1.3160 and 1.2942 in focus.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein
- Pound Under Pressure Ahead of Bank of England Meeting Aug 7, 2025
- The Reserve Bank of India kept interest rates unchanged. In Vietnam, inflationary pressures continue to ease Aug 6, 2025
- Gold Holds Near Two-Week High Aug 6, 2025
- Bitcoin waits for fresh directional spark Aug 5, 2025
- EUR/USD Pressured by External Factors Aug 5, 2025
- Stock indexes returned to growth amid renewed hopes for a September Fed rate cut Aug 5, 2025
- Weak US labor market data increased the likelihood of a Fed rate cut. Oil prices fall amid rumors that OPEC plans to raise production Aug 4, 2025
- Yen Weakens Amid Fed Rate Expectations and Bank of Japan Signals Aug 4, 2025
- Week Ahead: GBPUSD under pressure with fresh losses ahead? Aug 1, 2025
- Little Oil and Gas Junior at an Excellent Price Jul 31, 2025