• The BoE voted unanimously to hold at 3.75% in March, with former doves shifting to a hold amid rising energy costs.
• The ISM Services PMI fell to 54 in March, missing the 55 consensus, as employment dropped and prices paid surged.

GBP/USD traded flat on Monday, settling close to 1.3240 in a thin session with the UK on Easter Monday holiday. The pair bounced modestly from last week's low near 1.3180, which marked the weakest level since mid-March, but the recovery has so far been shallow. Price remains in a broader downtrend from the late January high around 1.3870, with sellers capping rallies toward the 1.3300 area in recent sessions.

On the Pound Sterling side, the Bank of England (BoE) voted unanimously to hold the Bank Rate at 3.75% at its March meeting, a notable shift from the narrow 5 to 4 split in February. Members who had previously supported cuts, including Sarah Breeden and Swati Dhingra, moved to a hold in response to rising energy costs tied to the Middle East conflict. The BoE warned that Consumer Price Index (CPI) inflation is likely to climb to between 3% and 3.5% over the coming quarters, while Gross Domestic Product (GDP) growth remains stalled and unemployment has risen to a 10-year high of 5.2%. Tuesday's S&P Global Services Purchasing Managers Index (PMI) for March, with a consensus of 51.2, is the next key release for the Pound.

On the US Dollar side, the ISM Services PMI fell to 54 in March from 56.1 in February, undershooting the 55 consensus. The employment sub-index dropped to 45.2, its lowest since December 2023, while prices paid surged to 70.7, the highest since October 2022. The combination of weakening payrolls and rising input costs reinforced stagflation concerns tied to the Iran conflict and elevated energy prices. The Federal Reserve (Fed) is holding the federal funds rate at 3.50% to 3.75%, with the Wednesday release of the Federal Open Market Committee (FOMC) minutes and Thursday's core Personal Consumption Expenditures (PCE) Price Index the next major catalysts for the US Dollar.

GBP/USD 5-minute chart

Technical Analysis

In the 5-minute chart, GBP/USD trades at 1.3236. The near-term bias is mildly bullish as price holds a steady grind above the 200-period EMA near 1.3233, keeping the intraday trend underpinned despite the tight range. The latest Stochastic RSI reading has eased back toward the lower half of its scale after failing to extend earlier over the 70 area, indicating fading upside momentum but not an outright bearish reversal while spot remains above the long-term intraday average.

Initial support emerges at 1.3233, where the 200-period EMA aligns with the latest cluster of minor pullbacks, followed by 1.3230 as deeper intraday downside risk if that average fails. A break below 1.3230 would expose 1.3220 as the next support area. On the topside, immediate resistance sits at 1.3240, the recent intraday high printed during the momentum peak, with a break there opening room toward 1.3250 as the next upside target while the short-term bullish bias persists.

(The technical analysis of this story was written with the help of an AI tool.)