The GBP/USD pair is holding steady near 1.3590 during Friday’s early European session as traders reassess the outlook for Bank of England (BoE) and Federal Reserve (Fed) monetary policy.
The Pound has recently come under pressure, but the latest price action suggests that the decline may be losing momentum rather than developing into a deeper bearish reversal.
Praxes Group’s brokers offer a closer perspective on the key aspects of this topic in the article below.
The pair briefly fell to 1.3570 before recovering and closing Thursday near 1.3594, leaving GBP/USD almost unchanged on the session. The stabilization is technically significant because the pair remains above its 100-day Simple Moving Average (SMA), a widely watched trend indicator that continues to provide a foundation for the broader bullish structure.
BoE Rate Expectations Weigh on the Pound
On the UK side, markets have become less convinced that the Bank of England will deliver another rate increase this year. According to LSEG data, traders now price approximately 24.7 basis points of tightening by December, effectively removing expectations for a full 25-basis-point hike.
This adjustment brings market pricing closer to the view held by many economists, who have generally expected the BoE to keep interest rates unchanged for the remainder of the year.
The shift represents a potential headwind for Sterling because lower expected UK interest rates reduce the relative yield advantage of Pound-denominated assets. Nevertheless, the technical picture remains more constructive than the change in rate expectations might suggest.
GBP/USD Consolidation Could Follow Recent Slide
Strategists at UOB Group expect GBP/USD to enter a period of consolidation after its recent decline. The pair fell to 1.3571 before closing almost flat, highlighting the presence of buyers around the lower end of the recent trading range.
UOB points to oversold conditions and slowing downward momentum as reasons why the Pound may avoid another immediate leg lower. Their near-term expectation is for GBP/USD to trade within approximately 1.3570–1.3620, rather than extending the previous decline aggressively.
This range-based outlook is consistent with the technical signals on the daily chart. Although the pair has pulled back from recent highs, there is currently insufficient evidence to confirm a structural bearish reversal.
Technical Outlook: Bullish Structure Above 100-Day SMA
From a technical perspective, GBP/USD retains a bullish bias while remaining above the 100-day SMA. The moving average is currently positioned around 1.3445, considerably below spot prices near 1.3590.
The pair is also trading above the 20-day Bollinger middle band, reinforcing the view that underlying demand remains present during shallow pullbacks. As long as these technical reference points hold, the broader upward structure remains intact.
Momentum indicators provide additional support for the bullish case. The 14-day Relative Strength Index (RSI) stands near 59.7, indicating positive momentum without reaching overbought territory. An RSI reading below 70 suggests that buyers may still have room to push prices higher before momentum becomes stretched.
However, GBP/USD is approaching the upper portion of its recent volatility range, meaning resistance could become increasingly important if the pair attempts another advance.
Key Resistance and Support Levels
The first major upside barrier is the August 25 high at 1.3655. A decisive daily close above this level would strengthen the bullish setup and expose the next technical hurdle around 1.3680, corresponding to the upper band of the 20-day Bollinger envelope.
A sustained break above 1.3680 could signal renewed upside momentum and potentially encourage traders to target higher psychological and technical levels.
On the downside, 1.3570 represents the first important support. This level corresponds to the August 27 low and is therefore an immediate test for buyers defending the recent consolidation zone.
A break below 1.3570 would shift attention toward the 20-day Bollinger middle band near 1.3540. Further weakness could expose the 100-day SMA at 1.3445, followed by the lower Bollinger band near 1.3405.
GBP/USD Forecast: Bullish Bias Intact
Overall, the GBP/USD outlook remains cautiously bullish while the pair holds above its 100-day SMA and maintains positive RSI momentum.
The immediate market environment, however, favors consolidation rather than an uninterrupted advance, particularly given changing BoE rate expectations and the potential for volatility following the Jackson Hole speech.
For bulls, a sustained move above 1.3655 would be an important technical development, with 1.3680 the next resistance target. Conversely, a break below 1.3570 would expose 1.3540 and potentially weaken the short-term bullish structure.
The key distinction is therefore whether GBP/USD can continue to defend its underlying trend support. Above the 100-day SMA, the broader bullish bias remains valid; below the nearby support levels, the probability of a deeper corrective phase increases.