GBP/USD remains stable around 1.3360 during the early Asian session on Friday. The Bank of England maintained its interest rates at the September meeting held on Thursday. The Fed has opted to increase its benchmark interest rate by 25 basis points, setting it within a range of 3.75% to 4.0% during the September meeting. The GBP/USD pair is trading in a stable manner around 1.3360 during the early Asian trading hours on Friday. Market participants are currently evaluating the recent interest rate decisions and policy signals from the US Federal Reserve and the Bank of England. The UK August Retail Sales data is set to be released later on Friday. The BoE’s Monetary Policy Committee reached a decision with a 6-3 vote to maintain the Bank Rate at 3.75% on Thursday, even as inflation significantly exceeded its 2% target.
However, policymakers cautioned that an increase was becoming progressively probable. The three dissenters voted to implement an increase of 25 basis points to 4.0%. A hike of at least 25 bps is widely anticipated at its next meeting in November, according to LSEG data. Conversely, the U.S. Federal Reserve declared a quarter-point increase on Wednesday, marking its inaugural hike since 2023. Fed Chair Kevin Warsh stated on Wednesday that “the plain fact is that inflation is too high and has been for too long.” And “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved,” he added. Traders are currently assigning a probability of approximately 53.1% to the likelihood of an additional US rate hike during the Fed’s upcoming meeting in October, a notable increase from nearly 44% just one day prior, as indicated by the CME FedWatch tool.
Strategists highlight that the Pound is “seeing marginal strength vs. the USD and extending its modest recovery in the aftermath of the BoE’s hawkish hold.” They add that “yield spreads appear to be offering renewed support to the GBP following their recent pullback, as markets signal additional confidence in the UK’s fiscal outlook in response to the PM Burnham’s budget comments.” In the daily chart, GBP/USD exhibits a bearish near-term bias as the spot price remains beneath a concentrated band of volatility and trend indicators. Price is situated below the 20-day Bollinger simple moving average and constrained by the lower band, whereas the 100-day moving average at 1.3438 imposes medium-term overhead pressure. The Relative Strength Index (14) at 31.3 approaches oversold territory, suggesting that downside momentum is extended, yet it has not yet been accompanied by a significant recovery of resistance levels.
On the topside, immediate resistance emerges at the Bollinger lower band around 1.3365, followed by the 100-day moving average at 1.3438, which reinforces the broader bearish structure. Further up, the Bollinger middle band at 1.3515 and the upper band near 1.3670 delineate subsequent obstacles that bulls must surmount to neutralise the prevailing downtrend. With no definitive support levels indicated by the metrics below the current price, the pair continues to be susceptible to further selling pressure as it operates beneath this consolidated resistance area.
