GBP/USD Price Analysis: Oscillates in trading range above 1.2700 ahead of Fed, BoE rate decision

Source Fxstreet
  • GBP/USD consolidates in a trading range near 1.2708 ahead of the Fed and BoE rate decisions this week.
  • The Relative Strength Index (RSI) indicator suggests the non-directional action of the pair. 
  • The immediate resistance level is located at 1.2738; the next support level will emerge at 1.2675.

The GBP/USD pair remains confined in a narrow trading range above the 1.2700 mark during the early European trading hours on Tuesday. Investors prefer to wait on the sidelines ahead of key events from the Federal Reserve (Fed) and the Bank of England (BoE). At press time, GBP/USD is trading at 1.2708, down 0.02% on the day. 

The Fed is widely anticipated to hold benchmark interest rates steady at a 23-year high of 5.25–5.50% at its January meeting on Wednesday, after a lengthy effort to tame rampant inflation. Meanwhile, the BoE is expected to keep rates steady. Nonetheless, signs that the inflation crisis is easing off might convince the UK central bank to lower rates after all.

From a technical perspective, GBP/USD oscillates in the two-week-old trading range on the four-hour chart. The major pair is above the 100-hour Exponential Moving Average (EMA). However, the bullish outlook of GBP/USD remains vulnerable as the Relative Strength Index (RSI) hovers around the 50 midlines, suggesting the non-directional action of the pair. 

The upper boundary of the Bollinger Band at 1.2738 acts as an immediate resistance level for the pair. A decisive break above the latter will pave the way to a high of January 26 at 1.2758. Further north, the next upside target to watch is a high of January 12 at 1.2785, en route to a high of December 28 at 1.2828.

On the other hand, a breach of the 1.2700 round figure will see a drop to the lower limit of the Bollinger Band at 1.2675. The critical contention level is seen at the 1.2600–1.2610 zone, representing the confluence of the psychological mark and a low of January 2. Any follow-through selling below the latter will expose a low of December 11 at 1.2535.

GBP/USD four-hour chart

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, 2024
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
The dollar weakened, equities dipped, and gold hit record highsThe dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
Author  Cryptopolitan
Sep 17, 2025
The dollar weakened, equities fell, and gold set new records on Wednesday as investors waited for a Fed rate cut later in the day.
placeholder
Markets in 2026: Will gold, Bitcoin, and the U.S. dollar make history again? — These are how leading institutions thinkAfter a turbulent 2025, what lies ahead for commodities, forex, and cryptocurrency markets in 2026?
Author  Insights
Dec 25, 2025
After a turbulent 2025, what lies ahead for commodities, forex, and cryptocurrency markets in 2026?
placeholder
ECB Policy Outlook for 2026: What It Could Mean for the Euro’s Next MoveWith the ECB likely holding rates steady at 2.15% and the Fed potentially extending cuts into 2026, EUR/USD may test 1.20 if Eurozone growth proves resilient, but weaker growth and an ECB pivot could pull the pair back toward 1.13 and potentially 1.10.
Author  Mitrade
Dec 26, 2025
With the ECB likely holding rates steady at 2.15% and the Fed potentially extending cuts into 2026, EUR/USD may test 1.20 if Eurozone growth proves resilient, but weaker growth and an ECB pivot could pull the pair back toward 1.13 and potentially 1.10.
placeholder
Gold tumbles below $4,650 as inflation fears and liquidity squeeze weighGold price (XAU/USD) remains under selling pressure near $4,640 during the early Asian session on Friday. The precious metal extends the decline as soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears.
Author  FXStreet
Yesterday 01: 22
Gold price (XAU/USD) remains under selling pressure near $4,640 during the early Asian session on Friday. The precious metal extends the decline as soaring crude oil and energy prices, driven by the escalating US-Israeli war with Iran, reignite inflation fears.
Related Instrument
goTop
quote