GBP/USD is currently hovering just below the 1.2900 level as the Federal Reserve (Fed) kept rates unchanged in line with market expectations. The focus now shifts to the Bank of England (BoE), which is anticipated to announce a rate cut for the first time since March 2020, with a close vote of 5-to-4 expected from the BoE’s Monetary Policy Committee (MPC).
Forex Today: Will the BoE Make the Move?
Fed Chairman Jerome Powell outlined the conditions necessary for a rate cut in September, setting the stage for upcoming key US data releases to influence the decision. The BoE, on the other hand, is expected to trim rates by a quarter-point on Thursday, although there is a possibility of disappointment if the MPC vote ends up closer than anticipated.
GBP/USD Technical Analysis
GBP/USD is struggling to gain bullish momentum after falling below 1.2900 from recent highs near 1.3045. The pair remains above the 50-day Exponential Moving Average (EMA) at 1.2791, indicating a bullish trend. However, bidders will be looking for higher lows to support a potential rally, with the key level to watch at 1.2600.
Analysis and Conclusion
The GBP/USD forecast suggests a potential rate cut by the BoE, while the Fed’s decision to hold rates steady has set the stage for upcoming US data releases to influence market sentiment. Traders should pay close attention to the BoE’s decision and the upcoming US Nonfarm Payrolls report for further insights into the direction of the GBP/USD pair. Overall, the current market dynamics indicate a cautious approach to trading the currency pair in the near term.