GBP/USD Price Forecast: Remains sticky around 20-day EMA in countdown to BoE’s policy

• GBP/USD flattens around 1.3475 as investors sideline ahead of the BoE’s monetary policy announcement.
• The BoE is expected to keep interest rates steady at 3.75%, with an 8-1 majority.
• Easing hawkish Fed prospects have strengthened the US Dollar.

The GBP/USD pair trades flat near 1.3475 during the European trading session on Thursday. The Cable consolidates as investors await the Bank of England’s (BoE) monetary policy announcement at 11:00 GMT.

Investors expect the BoE to leave interest rates unchanged at 3.75% for the third time in a row. The BoE is expected to perform a delicate balancing act between elevated energy prices amid the closure of the Strait of Hormuz due to conflicts between the United States (US) and Iran have prompted the United Kingdom (UK) inflation and rising economic risks.

The UK’s Consumer Price Index (CPI) report for March showed that the headline inflation accelerated to 3.3% Year-on-Year (YoY) from 3% in February. Lloyds Banking Group reported on Wednesday that it has halved the UK Gross Domestic Product (GDP) growth expectations to 0.5% from 1% projected earlier and seen the Unemployment Rate rising to 5.6% by the second half of the year, The Independent reported.

Meanwhile, the US Dollar (USD) trades broadly due to diminished hopes of an interest rate cut by the Federal Reserve (Fed), following the monetary policy announcement on Wednesday. The CME FedWatch tool shows that the odds of the Fed delivering one interest rate cut this year have diminished to 3.3% from 18.4% seen on Tuesday.

GBP/USD technical analysis

GBP/USD trades calmly at around 1.3475 as of writing. The near-term trend has turned sideways as the price remains close to the 20-day Exponential Moving Average (EMA) at 1.3468 for over two weeks.

The Relative Strength Index (RSI) around 52 hints at steady, modestly positive momentum rather than an overextended advance, leaving scope for gradual upside as long as price stays anchored above nearby supports.

On the topside, initial resistance emerges at the 50.0% Fibonacci retracement at 1.3509, with further barriers at the 61.8% level near 1.3593 and then 1.3712 and 1.3864, corresponding to the 78.6% and 100% retracements, respectively.

Looking down, immediate support is reinforced by the 38.2% retracement at 1.3425; a downside move below that level would expose the 23.6% level around 1.3321, while only a drop toward the structural floor near 1.3154 would seriously undermine the current constructive tone.

(The technical analysis of this story was written with the help of an AI tool.)