Over the past 24 to 48 hours, the GBP/USD exchange rate exhibited notable volatility, closing around 1.33835, slightly rising from yesterday’s close. This movement was primarily driven by the combined impact of the Bank of England (BoE) and U.S. inflation data. As widely expected, the BoE cut its benchmark interest rate from 4.0% to 3.75% in the December meeting, marking the first rate cut in several months. However, the relatively hawkish tone supported the pound. Meanwhile, weak U.S. inflation data pressured the dollar, further boosting the GBP/USD exchange rate.

In addition, the Bank of Mexico (Banxico) reduced its rate from 7.25% to 7%, a move that does not directly affect GBP/USD but adds to the broader context of global central banks easing. This reinforces market consensus around the BoE’s cut and softening U.S. inflation. For the average investor, this means the pound remains influenced by a mix of macroeconomic data and central bank policy shifts, causing increased market fluctuations that require more cautious and adaptive trading strategies when dealing with GBP.

Daily Chart

The daily chart reveals GBPUSD has been trading within a range since the beginning of the year. Recently, it rebounded from the 1.315 level approaching the 200-day moving average (1.34042), facing strong resistance there multiple times. The Bollinger Bands suggest price is near the middle band with slight volatility contraction, while the MACD remains above zero, indicating bullish bias. The overall trend is not fully confirmed but short-term momentum is bullish.

1H Chart

The hourly chart over the past 3-5 days shows GBPUSD climbing from below 1.33, breaking above the recent consolidation high near 1.338 and surpassing short-term 50 and 100-period moving averages. Bollinger Bands expansion indicates increasing volatility. The MACD has just formed a bullish crossover and RSI broke above 50, signaling strengthening momentum and a likely continuation of the short-term uptrend.

Technical Trend:  The current trend of GBPUSD is best described as ‘Cautiously Bullish’ with a developing uptrend tempered by range-bound price action and potential volatility.

GBPUSD’s technical outlook hinges on whether it can sustain above 1.34 to confirm this level as new support. The daily chart hints at a forming double bottom consolidation pattern, providing a foundation for a rebound. The hourly chart’s bullish MACD crossover and expanding momentum reinforce the likelihood of further gains. Recent candlestick patterns, particularly bullish engulfing formations, strengthen the immediate bullish sentiment. Traders should monitor resistance zones carefully and be wary of false breakouts.

Today’s economic calendar in GMT+1 shows no major UK or US data directly impacting GBPUSD. However, UK retail sales data due this morning could induce volatility depending on how actual results compare with forecasts. Later, the US consumer sentiment report and inflation expectations are also scheduled and worth watching. Overall, no significant direct events are expected to cause large GBPUSD price swings today.

Resistance & Support

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