GBP/USD is holding near 1.3317 as of Thursday morning.
On Wednesday, the pound Sterling showed little reaction to inflation figures that came in below expectations. Investors are adopting a cautious, wait‑and‑see stance ahead of today’s labour market data and the Bank of England policy session. Nevertheless, the currency remains sensitive to movements in the US dollar following the Federal Reserve’s recent meeting.
May’s inflation held steady at 2.8% year‑over‑year, falling short of the market’s 3.0% forecast. The softer‑than‑expected reading has reignited discussion about whether the Bank of England will consider raising rates later this year.
Market participants continue to anticipate a single rate hike before year‑end. Should the Bank signal a willingness to maintain its current stance without further tightening, pressure on the British pound could intensify.
The upcoming Bank of England meeting is expected to leave the policy rate unchanged. Nonetheless, several members of the Monetary Policy Committee, including Chief Economist Huw Pill, may again advocate for tighter policy. Their positions will be closely monitored by the market.
Investors are also placing significant weight on upcoming employment data, which will provide further guidance on the Bank’s future policy direction. At the same time, developments within the UK Labour Party are being watched for potential political risk premiums affecting the pound.
At present, the pound remains relatively stable. However, the next 24 hours may prove pivotal in shaping expectations for the Bank of England’s rate path and the subsequent movement of the British currency.
GBP/USD Technical Analysis
The H4 chart of GBP/USD shows that the pair has completed a downward impulse to 1.3262, with a corrective rally anticipated toward 1.3340. Currently, a wide consolidation wedge is developing beneath this zone. A decisive upward breakout could extend the rally toward 1.3500, whereas a downward breach may trigger a test of 1.3194. The MACD indicator supports this outlook, as its signal line remains well below zero and persistently bearish.
On the H1 chart, GBP/USD is trading within a tight consolidation band centered around 1.3300, which has temporarily dipped to 1.3297. The pair is poised for a rebound toward 1.3340. This view is reinforced by the Stochastic oscillator, whose signal line sits above 50 and is climbing steadily toward 80.
