• GBP/USD logged another flat session, coiling into a tight range before a heavy 48 hours.
• Rate markets have dropped their cut bets and now lean toward hikes on both sides of the Atlantic.
• Wednesday brings UK inflation in the morning and the Fed's decision, projections, and a new Chair in the evening.

GBP/USD spent Tuesday going almost nowhere, closing fractionally higher near the middle of a range it has refused to leave for months. The stillness is not for lack of news; it is the calm of a market that has read Wednesday's calendar and decided to wait. UK inflation prints before the London open, the Federal Reserve (Fed) hands down its decision and fresh projections after dark, and a brand new Chair takes questions for the first time. None of it rewards a directional bet a day early.

Stuck between the averages

On the daily chart Cable is wedged between its 50-day Exponential Moving Average (EMA) near 1.3450 and its 200-day EMA around 1.3400, and Tuesday did nothing to settle the standoff. Price stalled close to 1.3450 before fading, then dipped just under 1.3400 before recovering, boxed inside barely fifty pips for the session. The daily Stochastic Relative Strength Index (Stoch RSI) sits mid-range, the technical signature of a market with no conviction either way.

The cut trade is dead

The real story beneath the quiet tape is what rate markets have done, and the move has been one-way. The Iran War drove energy costs higher and dragged inflation back up across both economies, and traders have responded by abandoning rate cuts and leaning toward hikes into late 2026, from the Fed and the Bank of England (BoE) alike.

The awkward part is the timing: Crude Oil has slid this week on a US-Iran peace deal, leaving both central banks set to lean hawkish against an inflation shock whose main driver is already in retreat. The BoE carries the sharper contradiction, asked to flag higher rates even as UK Gross Domestic Product (GDP) shrank in April.

A 48-hour gauntlet

UK Consumer Price Index (CPI) opens the run at 06:00 GMT, with the monthly figure seen cooling to around 0.4% but the annual rate expected to climb from April's 2.8% as the energy shock feeds through. Core inflation near 2.7% and steady producer prices would keep the hawks fed, and US Retail Sales at 12:30 GMT is a sideshow next to it.

The Fed at 18:00 GMT is the main event, with a hold all but locked and the dot plot the only number that matters. The Fed's last projections implied a cut this year while the curve now prices a hike, and the new dots show whether the committee has moved to meet the market. Chair Warsh's first press conference at 18:30 GMT is the wildcard, his tone parsed for how hard he leans on inflation. Thursday's BoE, where a wider vote for a hike is the risk, caps the week.

Levels and the lean

Resistance: The first ceiling sits at 1.3450, reinforced by the 50-day EMA; a clean break opens the 1.3500 handle.

Support: The floor is 1.3400, propped by the 200-day EMA and the round number; lose it and Tuesday's low gives way to 1.3350.

Bias: Higher while 1.3400 holds, with a break above 1.3450 the trigger. A hot UK inflation print is the cleanest fuel and a hawkish turn in the Fed's dots the clearest threat; losing 1.3400 flips the picture lower toward 1.3350.

GBP/USD daily chart