• GBP/USD trends close to a two-month low as the Pound struggles.
• The BoE voted 7-2 to hold rates, but two policymakers backed a hike to 4.00%.
• The Fed held rates at 3.50%-3.75%, with the removal of “additional rate adjustments” reinforcing a more cautious, data-dependent stance.

The GBP/USD pair trades near a two-month close to the 1.3210 level on Thursday as the Pound Sterling (GBP) struggles to gain traction after the Bank of England (BoE) left interest rates unchanged at 3.75%, while the US Dollar (USD) remains supported by the Federal Reserve’s (Fed) cautious policy message.

The BoE voted 7-2 to keep the Bank Rate steady, with most policymakers favoring patience amid uncertainty over the inflation outlook and recent volatility in energy prices. However, the split vote showed that inflation concerns remain, as two members supported raising the rate to 4.00%.

BoE officials warned that the war in the Middle East has pushed energy prices higher, while inflation has risen to 3.3% and is expected to increase further this year. The central bank’s cautious tone limited the Pound’s upside as markets assessed whether policymakers could still move toward tighter policy if second-round inflation pressure builds.

Meanwhile, the US Dollar stayed firm after the Fed held interest rates unchanged in the 3.50%-3.75% range in Kevin Warsh’s first meeting as Fed Chair.

The Fed removed its previous reference to “additional rate adjustments,” reinforcing a more data-dependent stance and reducing expectations of near-term easing.

Short-term technical analysis:

On the 4-hour chart, GBP/USD trades at 1.3205, extending a bearish bias as the pair holds beneath both the 20-period Simple Moving Average (SMA) at 1.3363 and the 100-period SMA at 1.3404. The clustering of nearby horizontal levels above price, alongside an oversold Relative Strength Index (RSI) around 25, suggests the downtrend is stretched but still capped by a dense band of overhead supply.

On the topside, initial resistance appears at 1.3227, followed by 1.3262 and 1.3298, before the stronger barrier at 1.3324. Beyond that, the 20-period SMA at 1.3363 and the 100-period SMA near 1.3404 reinforce a broader resistance zone that would need to be reclaimed to ease downside pressure, while the absence of nearby chart-derived supports below spot leaves the pair vulnerable to further declines if sellers remain in control.

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