GBP/USD Price Forecast – GBPUSD=X Stalls Around 1.3560 as BoE Split and Fed Cut Bets Collide at 1.35

GBP/USD – BoE’s dovish pivot tests ascending channel support near 1.35–1.37

GBP/USD price location and structure around 1.3560–1.3570

GBP/USD is trading around 1.3560–1.3570 after dropping from the late-January peak near 1.3850, sitting directly on the key decision zone around 1.3520–1.3500. That band aligns with the lower boundary of the ascending channel that has guided price higher since November, the local support shelf from late December/early January near 1.3530, and the 200-EMA area on the 4-hour chart. As long as GBP/USD holds above roughly 1.3520–1.3500, the November uptrend is technically still alive and the slide from 1.3850 is a deep correction inside a bullish structure. A clean daily close below 1.3500 would mark a structural break, flipping the focus toward 1.3400 first and then the 1.3350 “support-reversal” area that capped price earlier in the winter.

BoE’s 5–4 split and why it hit GBP/USD so hard

The latest Bank of England decision left Bank Rate at 3.75%, but the message for GBP/USD was in the vote count, not the headline rate. Markets expected a comfortable 7–2 hold; they got a narrow 5–4 split, with four MPC members already voting for an immediate cut. That surprise pushed markets to price roughly 50 bps of easing for 2026 and open the door to a first cut as early as March, compressing the UK–US rate differential that has supported the pound since late 2025. The reaction was immediate: GBP/USD sold off about 0.6% on the day, sliding from the mid-1.36s toward the low 1.35s as sterling’s yield premium was repriced lower and the prior bullish narrative was downgraded to “conditional”.

Channel damage: from breakout above 1.38 to testing the base around 1.3520

Technically, GBP/USD has moved from strength to stress in less than two weeks. In January the pair broke above the upper edge of the rising channel and printed a high near 1.3869, the strongest level since September 2021. After the BoE’s dovish shift, price reversed and cut back down through three structural layers: first the upper channel edge, then the mid-channel region anchored around 1.3640, and finally down toward the lower boundary around 1.3520–1.3530. That sequence has erased most of the late-January gains and turned what was a clean breakout into a potential bull trap. The current stabilization around 1.3560–1.3570 looks more like a corrective pause after a sharp flush than a fresh directional impulse.

Daily EMA and RSI: neutral momentum but weakening gradient for GBP/USD

On the daily chart, GBP/USD is caught between a still-supportive medium-term trend and softening short-term momentum. Price is holding just above the rising 50-day EMA at 1.3496, which currently acts as a dynamic floor, but it is capped by the 9-day EMA at 1.3626, which is rolling over and pressing down on rallies. The 14-day RSI is anchored around 50, a neutral mid-line read that confirms the market has shifted from trending to indecisive. A sustained move in RSI above 55 would be the first signal that buyers are regaining the initiative; a drift back toward 45 would reinforce the idea that the bounce from 1.3520–1.3530 is just a pause inside an emerging downswing.

4-hour map: Fibonacci, 200-EMA and the 1.3520–1.3500 decision shelf

Zooming into the 4-hour structure, GBP/USD has stalled around the 61.8% Fibonacci retracement of the January upswing near 1.3580, a level that often separates a standard pullback from a full trend reversal. Just below, the cluster of the rising trendline from mid-January, the 200-EMA and the horizontal support around 1.3520–1.3500 defines the tactical line in the sand. Hold above that cluster, and the pair can still launch another test of 1.3690–1.3760 as part of the broader uptrend from November. Lose it on a decisive close, and the probability jumps that the move off 1.3850 is the first leg of a more extended bearish phase with 1.3400 as the next obvious magnet and 1.3350 as the deeper target.

US data and DXY: weak jobs, softer dollar but no full-blown collapse

The US side of GBP/USD is not strong enough to crush sterling on its own, which is why the pair is not trading significantly below 1.35 yet. The US Dollar Index is hovering around 97.8 after a rebound from the late-January low near 95.6, staying above the 50-period EMA around 97.6 but still capped by heavy resistance in the 98.25–98.90 zone and below the 200-EMA. Recent labour figures have undercut the dollar’s momentum: initial jobless claims climbed to 231,000 from 209,000, overshooting the 212,000 forecast, and ADP private payroll growth printed just 22,000 versus expectations around 48,000. Those numbers point to a cooling US jobs market and have reinforced the narrative of a more dovish Fed later this year, limiting upside in the dollar and cushioning GBP/USD from a steeper slide.

Fed path vs BoE path: how the rate curve shapes GBP/USD beyond the next 50 pips

Rate expectations are now the core driver for GBP/USD beyond the immediate technical levels. The CME-implied probabilities show a strong chance that the Federal Reserve leaves rates unchanged in March, with June increasingly priced as the starting point for cuts. At the same time, the BoE’s 5–4 vote signals that the UK is closer to easing than previously thought. That asymmetry – a BoE leaning toward earlier cuts versus a Fed that is cautious and data-dependent – points to a gradual narrowing of the GBP–USD yield gap across 2026. That shift is structurally negative for GBP/USD on a medium-term horizon even if the dollar is tactically soft after weak data, and it argues that rallies toward 1.37–1.38 are more likely to be sold into than chased higher while this policy configuration persists.

Cross-currency performance: sterling still resilient intraday but losing altitude on the week

Relative performance tables show GBP posting intraday strength against USD in some sessions – the pound has recently been the strongest currency versus the dollar over a short window – yet the multi-day picture is decisively weaker. The drop from just under 1.3850 to the 1.35 area has wiped out much of January’s outperformance, and every push back into 1.36–1.37 has met selling interest. That pattern is typical of a market transitioning from an impulsive trend to a distribution phase: short-term heat-map snapshots can show GBP green against USD, but the dominant direction over weeks is now sideways-to-lower rather than an uninterrupted grind higher.

UK political noise and why it matters less than the BoE for GBP/USD

Domestic politics adds background noise but does not override the monetary story. Ongoing questions around Labour leadership and reputational issues keep a low-grade risk premium embedded in GBP, yet the decisive factor for GBP/USD remains the BoE’s path relative to the Fed. Without strong UK-specific growth or fiscal upside surprises, the pound has little independent engine to offset the negative impulse from a more dovish central bank. In practice, that means UK headlines can amplify moves around events but are unlikely to reverse a trend driven by rates; the key swing factor remains how quickly markets bring forward BoE cuts versus how slowly the Fed is willing to ease.

Trading map: key GBP/USD levels – 1.3520–1.3500 as pivot, 1.3690–1.3760 as sell zone

Structurally, GBP/USD is sitting on a clear technical pivot with equally clear targets on either side. On the downside, the first critical shelf is 1.3520 (channel base and local support), followed closely by the 50-day EMA at 1.3496. A daily close below that 1.3520–1.3496 pocket would confirm a break of both the trendline and the medium-term moving average, unlocking a move toward 1.3400 and then 1.3350, where prior resistance from earlier in the winter aligns with horizontal demand. On the topside, the initial resistance is the 9-day EMA at 1.3626; reclaiming and holding above that opens room toward 1.3690 and 1.3760, and only a sustained break above those levels would put the January high at 1.3869 and the channel ceiling near 1.4050 back into play, with a more ambitious extension target around 1.4248 from April 2018.

Verdict on GBP/USD: hold with a downside bias while the market respects 1.35

Putting the macro and technical pieces together, GBP/USD around 1.3560–1.3570 is best viewed as a hold zone with a clear downside tilt rather than an obvious buy or an immediate crash short. The BoE has signalled a faster route to cuts than previously assumed, undercutting sterling’s carry support, while the US dollar is weak enough to prevent a disorderly collapse but not weak enough to flip the trend back aggressively higher. As long as the pair trades between roughly 1.3520 and 1.3690, the strategy skew favours selling strength into the 1.3690–1.3760 band and using a confirmed daily break below 1.3500 as the trigger for a more explicit bearish stance targeting 1.3400 and 1.3350. Only a decisive reclaim of 1.3760 and a shift in rate expectations back in favour of the pound would justify upgrading GBP/USD from cautious downside bias to a clean bullish call.

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