The GBPUSD pair is currently facing challenges in surpassing the 1.30 level as both the FOMC and BoE decisions approach. The US dollar remains under pressure following elevated Core PCE estimates and robust Retail Sales data.
Market expectations for the Fed have shifted from over 80 basis points of easing to approximately 59 basis points. The focus is now on today’s FOMC decision, with expectations for rates to remain unchanged.
Impact Of European Developments
Recent European defence spending news has positively impacted the pound, while UK wage growth and persistent inflation complicate the BoE’s position. The BoE is expected to maintain rates with a 7-2 split, anticipating two rate cuts by the year’s end.
Technically, GBPUSD is trading at 1.30 on the daily chart, with buyers favouring support around 1.28. Sellers are looking for a break below this level toward the major trendline at 1.26.
Examining the 4-hour chart, the pair is within a rising channel. Buyers may target the bottom trendline for upward movement, while sellers await a break lower for potential pullbacks.
On the hourly chart, buyers are watching for a bounce at the bottom trendline, and sellers are looking for a break lower. Daily range indicators are anticipated to be less reliable due to the imminent FOMC event.
Key Upcoming Events
Upcoming events include the FOMC Policy Decision today, followed by the BoE Policy Decision and US Jobless Claims data tomorrow.
With the Federal Reserve set to announce its policy decision today, traders should take note of the shifting sentiment surrounding potential rate cuts. Just weeks ago, markets had priced in over 80 basis points of easing by year-end. That expectation has now moderated to around 59 basis points, reflecting the resilience of the US economy. Elevated Core PCE estimates and firm retail sales figures have kept the dollar under pressure, but the extent of its weakness will depend on how policymakers guide future expectations.
For sterling, recent developments in European defence spending have lent support to the currency, while domestic economic pressures complicate the Bank of England’s path forward. Inflation remains persistently high, with wage growth maintaining pressure on price stability. As a result, policymakers are widely expected to keep rates unchanged, with the voting split likely remaining at 7-2. Markets anticipate two cuts before the end of the year, though incoming data will play a role in shaping that outlook.
From a price action perspective, the GBPUSD pair has remained firm at 1.30, a level that has historically acted as both support and resistance. Buyers continue to defend the 1.28 region, which aligns with a key demand area on the daily chart. Should this level give way, stronger support exists around 1.26, near a major trendline that has held firm in previous pullbacks.
Zooming into the 4-hour timeframe, the pair remains within a structured rising channel. Those positioning for further upside may look to enter near the lower boundary of this formation, expecting price to rotate higher. Conversely, a decisive break beneath this trendline could open the door for further declines.
At the hourly level, movements are likely to become more erratic as the FOMC decision nears. Traditional range indicators may offer less reliability, as volatility tends to pick up sharply in response to these high-stakes announcements. Those looking for short-term setups will be watching whether price attempts a bounce from the trendline or whether sellers gain momentum and force a move downward.
Beyond today’s policy announcement, attention will quickly shift to tomorrow’s Bank of England decision. This will be accompanied by US jobless claims data, which could further guide expectations around the labour market’s resilience. These events will set the tone for direction in the days ahead, particularly if any surprises emerge from policymakers on either side of the Atlantic.
