- pulls back from multi-year highs as BoE decision approaches
- Bears eye a daily close below 1.3600 to extend downside momentum
GBP/USD has turned weekly gains into losses after a quiet week, slipping toward the 1.3600 level early on Thursday as traders’ positions ahead of the Bank of England’s rate decision. The central bank is expected to leave rates unchanged, with markets focused on guidance over the duration of the pause and the scope for easing later in the year, despite still-elevated inflation.
The policy decision comes as the pair is testing a key support near 1.3615 after resuming its pullback from the 4½-year high of 1.3868. A break lower could meet the 20-day SMA at 1.3565 and the 38.2% Fibonacci retracement of the November–January rally at 1.3540. Then, all the attention could shift to the crucial floor near 1.3500, where the 50- and 200-day SMAs and the rising trendline from November converge. Failure to pivot there would violate the upward trajectory from 1.3000.
While momentum indicators point lower, the stochastic oscillator is entering oversold territory, suggesting downside momentum may be losing steam. Nevertheless, a bullish reversal would require a close above Wednesday’s resistance at 1.3730, which could open the way towards the 1.3815–1.3840 zone ahead of the 1.3900–1.3950 region.
In summary, GBP/USD may remain subdued in the near term, with bearish momentum likely to resume on a sustained close below 1.3615.
