The GBPUSD pair has broken below the bottom trendline of the rising channel, indicating a potential for a deeper pullback. The Federal Reserve’s recent decision to keep rates steady while adjusting their growth and inflation forecasts has provided support to the USD.
Conversely, the Bank of England maintained interest rates with an 8-1 vote. Market expectations for easing narrowed from 53 basis points to 44 basis points by year-end due to ongoing high wage growth and persistent inflation.
Technical Outlook On Daily Chart
On the daily chart, GBPUSD struggles to surpass the 1.30 mark. Buyers may find risk-reward opportunities around the 1.28 support zone, while sellers anticipate a drop to around 1.26.
In the 4-hour timeframe, the price has fallen below the bottom trendline, potentially encouraging sellers to push for a deeper pullback towards 1.28. Buyers will aim for a return to the channel to target higher levels.
The 1-hour chart shows a downward trendline indicating bearish momentum, with sellers likely to exploit this to achieve new lows. Buyers, however, will seek a breakout to rise towards the 1.3050 level.
The recent movement in GBPUSD suggests a shift in sentiment, as the pair slips beneath the lower boundary of the ascending channel. This signals that downward pressure is building, particularly as traders reassess monetary policy expectations. The Federal Reserve’s decision to keep interest rates unchanged, while modifying its outlook on growth and inflation, has added strength to the US dollar. Steady economic expansion and persistent price pressures in the United States diminish the likelihood of aggressive rate cuts, reinforcing support for the greenback.
Meanwhile, the Bank of England opted for a hold stance, with just one member dissenting in favour of an immediate reduction. This cautious approach highlights concerns over wage growth and inflationary persistence. With market-implied easing expectations moderating, the repricing of rate cuts suggests confidence in the UK’s economic resilience. Yet, the pound has struggled to hold higher levels, as uncertainty surrounding future policy actions weighs on traders’ willingness to drive prolonged rallies.
Shorter Timeframe Analysis
From a technical perspective, GBPUSD faces resistance near the psychological 1.30 level. While buyers assess opportunities at 1.28, sellers appear more willing to extend declines toward 1.26. The daily structure leans in favour of continued pressure, with price action struggling to reclaim lost ground. Retracements have been shallow, reflecting hesitant buying interest.
On shorter timeframes, sellers remain in control following the break below key supports. On the four-hour chart, the loss of the lower trendline suggests momentum is with those looking for further declines. The 1.28 area stands as a logical near-term downside target, though any sharp rebounds could see a push back into the previous structure. Those favouring upside scenarios would need a firm move within the former channel before considering a sustained push towards prior highs.
The one-hour chart reinforces a bearish setup, with a defined trendline guiding lower highs. This structure gives sellers an advantage as long as price remains below it, applying pressure for new lows in coming sessions. That said, if buyers manage to overcome this trendline, short-term sentiment could quickly shift towards reclaiming 1.3050. Strength in that region would be required to challenge broader bearish themes.
