• GBP/USD consolidates below 1.3700 as traders await the Bank of England policy decision.
• US services data surprised higher, with the Institute for Supply Management PMI beating forecasts despite softer hiring signals.
• UK services activity improved, but rising prices flagged by S&P Global may limit near-term BoE easing.

The Pound Sterling (GBP) drops against the US Dollar (USD) on Wednesday, and it remains trading below the 1.3700 figure, posting losses of 0.23% as traders wait for the Bank of England’s (BoE) monetary policy decision.

Sterling weakens as mixed risk sentiment and resilient US services data keep the Dollar modestly supported

Market mood is mixed as investors rotate out of tech companies, amid the uncertainty about the business risks of AI. In the meantime, a short-lived government shutdown in the US delayed the release of the US Nonfarm Payrolls report for January and other labor market data.

Consequently, traders got back to other data, such as the ADP Employment Change for January, which revealed that private companies hired 22K people, missing estimates of 48K jobs created in the first month of 2026.

In the meantime, the Institute for Supply Management revealed that the Services Purchasing Managers Index (PMI) for January exceeded estimates of 53.5, rose by 53.8, unchanged from December’s reading.

Digging deeper into the data, the Employment index expanded for the second straight month but decelerated compared to December’s print. The Prices Paid sub-component rose from 65.1 in December to 66.6, its highest level sincd the previous two months.

Following the ISM’s release, the Greenback mildly advanced as depicted by the US Dollar Index (DXY). The DXY, which tracks the buck’s performance versus six currencies, is up 0.13% at 97.51.

Across the pond, S&P Global revealed that business activity in the services sector grew strongly in January. The same polls showed an increase in prices, which could deter the BoE from cutting rates.

On Thursday, the BoE is expected to hold rates unchanged at 3.75%. However, towards the year’s end, money markets had priced in 35 basis points of easing, revealed Prime Market Terminal data.

GBP/USD Price Forecast: Technical outlook

The GBP/USD technical picture shows the pair is poised to consolidate within the 1.3600-1.3700 range, after retreating from a yearly high of 1.3868 hit on January 27. The selling pressure has eased as shown by the Relative Strength Index (RSI), which remains at bullish territory, but stabilized after diving from around the 78.45 level.

For a bullish continuation, GBP/USD must reclaim 1.3700. A breach of the latter will expose 1.3750, followed by the January 30 high at 1.3818. Conversely, if GBP/USD falls below 1.3650, it would open the door to test the February 2 low at 1.3623 ahead of 1.3600.