The British pound experienced a notable decline on Yesterday following the Bank of England’s policy decision, while the U.S. dollar continued to recover from prior weakness. GBP/USD moved lower during the session as markets reacted less to the unchanged policy rate and more to the shift in the voting pattern among policymakers. The rise in abstentions highlighted growing uncertainty within the Bank of England, weighing on sterling sentiment.
From a technical perspective, GBP/USD has now declined toward the 50-day EMA, which is situated just below the 1.35 level. This area was a previously anticipated downside target and is now being tested as near-term support. The sharp repricing also suggests that recent calls for a sustained collapse in the U.S. dollar were premature, as the greenback has begun to regain traction against select currencies — notably the pound and the euro.
At this stage, GBP/USD may consolidate around the 1.35 region as traders assess whether the move has become overstretched. A period of stabilization here would not be surprising. A rebound from this zone could open the door for a recovery toward the 1.3750 area, though such a move would likely require calmer price action rather than an impulsive rally. Conversely, a decisive break below 1.35 would expose GBP/USD to further downside, with the 1.33 level and the 200-day EMA emerging as key targets for sellers.
Friday’s session could prove pivotal, but patience is warranted. For bulls, a phase of subdued, sideways trading would be healthier than an immediate attempt to push prices sharply higher. In summary, GBP/USD remains in a corrective phase, with direction dependent on whether the 1.35 support zone can hold amid lingering policy uncertainty at the Bank of England and a gradually stabilizing U.S. dollar.