GBP/USD Wavers Ahead of BoE Rate Cut & Fed Shakeup.
Pound Sterling fluctuates as markets await the Bank of England’s rate decision and the appointment of Fed official Kugler’s replacement
FUNDAMENTAL OVERVIEW:
The Pound Sterling (GBP) is trading in a narrow range near 1.3300 against the US Dollar (USD) during Wednesday’s European session, with the GBP/USD pair mirroring a broadly rangebound Greenback. Market participants are awaiting the announcement of a replacement for Federal Reserve (Fed) Governor Adriana Kugler, who resigned last Friday.
As of writing, the US Dollar Index (DXY) — which measures the USD’s performance against a basket of six major currencies — hovers around 98.80.
On Tuesday, US President Donald Trump told reporters that he plans to reveal Kugler’s successor by the end of the week. Analysts suggest that the appointment of Trump’s preferred candidate to the Federal Open Market Committee (FOMC) could threaten the Fed’s policy independence, potentially aligning its decisions with the president’s economic priorities.
All eyes will be on the Bank of England’s (BoE) interest rate decision scheduled for Thursday. The central bank is broadly expected to lower its benchmark rate from 4.25% to 4.0% at the August meeting to support the economy, which faces rising unemployment and pressure from global trade disruptions triggered by US tariffs.
BoE Governor Andrew Bailey’s post-decision speech will also be closely scrutinized for clues about the future direction of UK monetary policy. Any dovish tone in his remarks could weigh on the Pound Sterling (GBP) in the near term.
GBP/USD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
GBP/USD is trading within an up channel.
GBP/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Neutral Zone, while the Stochastic oscillator suggests Negative trend.
Immediate Resistance level: 1.3408
Immediate support level: 1.3140
HOW TO TRADE GBP/USD
After a sharp rally, GBP/USD lost momentum and faced rejection, triggering a reversal to the downside. Although the pair made another attempt to climb higher, the move was short-lived, and price dropped sharply, breaking through a key support level. Currently, GBP/USD is approaching a resistance zone; if this area fails to hold as support, the pair may resume its downward trajectory.