Over the past 24 to 48 hours, the British Pound against the US Dollar (GBP/USD) has shown weakness, sliding from yesterday’s closing price around 1.3204 to a close near 1.3169, marking fresh two-month lows with a decline close to 0.26%. The main driver behind this movement was the recent Bank of England (BoE) decision. While the interest rate was held steady at 3.75%, market expectations for a possible rate hike in July diminished significantly, putting downward pressure on the Pound.
UK inflation holding steady at 2.8% provided the BoE with room to keep rates unchanged and lowered the urgency for further tightening. This caused investors to reassess bullish bets on the Pound, particularly amid ongoing global economic and geopolitical uncertainties. The Sterling’s weakness also reflects broader economic softness in the UK and political uncertainties that have dampened market confidence.
For the average investor, this means the Pound may face continued pressure in the near term, especially if the US dollar remains strong supported by positive US data. The market is currently in a cautious stance, waiting for more economic data to better gauge the UK’s economic outlook and the Bank of England’s future policy moves.
The daily chart shows a downtrend from recent highs, with price consistently trading below the 50-day (1.34627) and 200-day (1.34067) moving averages, indicating bearish dominance. A converging triangle pattern has developed over the past three weeks, signaling balance between buyers and sellers but skewed towards a bearish breakout. Bollinger Bands have contracted, suggesting diminished volatility before a potential breakout. MACD remains negative near lows, with no evident reversal in momentum, reinforcing the overall bearish sentiment.
On the hourly chart over the last 3-5 days, GBPUSD exhibited short-term bearish oscillations, repeatedly testing support around 1.3170. The 50-EMA and 200-EMA are aligned bearishly, confirming continued downside pressure. MACD histogram’s shrinking negative bars hint at a possible short-term corrective rebound. The recent bearish engulfing candlestick formation implies that bearish pressure is likely to persist over the next 24 hours, favoring short positions on rallies.
Technical Trend: Cautiously Bearish
Technical signals remain cautious to bearish. The forming triangle favors downside, with no MACD bullish crossover on the daily chart. The recent bearish engulfing candlestick indicates continued bearish pressure near term. A breakdown below 1.3150 could accelerate the decline, suggesting traders keep a watchful eye on this level and key fundamental releases to time entries.Today’s GMT+1 economic calendar highlights the UK’s May Retail Sales release, forecast at +1.8% year-over-year and +0.4% month-over-month. This data is crucial for GBPUSD, as stronger retail sales could bolster the pound, while disappointing figures might exacerbate the current weakness. Other key releases such as Japan’s CPI and Germany’s Producer Price Index have less direct impact on GBPUSD today. Therefore, the UK retail sales figure will be the focal point for traders monitoring this pair.
Resistance & Support
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