GBP/USD Under Pressure as Markets Price Higher US Rates

Summary:

GBP/USD fell to fresh two-month lows near 1.3200 on Thursday as a hawkish Federal Reserve fueled broad US Dollar strength, overshadowing stronger-than-expected UK employment data and the Bank of England's decision to keep rates unchanged.

Sell GBPUSD

EXP

Trading

1.32250

ENTRY

1.30000

TGT

1.33100

1.32114 -0.00775 -0.58%

Point

Flat

1.30000

TGT

CLOSING

1.32250

ENTRY

1.33100

The British Pound remained under pressure on Thursday, with GBP/USD falling toward the 1.3200 level as investors continued to favor the US Dollar following a hawkish Federal Reserve policy decision.

The Bank of England left interest rates unchanged at 3.75%, as widely expected, while two policymakers voted for a rate hike. The central bank also lowered its inflation forecasts and upgraded its growth outlook, suggesting confidence that inflation pressures may gradually ease without derailing economic activity.

UK labor market data released earlier in the day painted a relatively resilient picture. The unemployment rate unexpectedly fell to 4.9% from 5.0%, while the economy added 100,000 jobs, beating forecasts for an 80,000 increase. Wage growth also remained firm, with average earnings excluding bonuses holding steady at 3.4%.

Despite the encouraging data, Sterling struggled to gain traction as markets focused on the Federal Reserve's policy outlook. The Fed left rates unchanged at 3.50%-3.75%, but removed language suggesting an easing bias and signaled that further tightening remains possible. Updated projections showed that nearly half of policymakers expect another rate increase before year-end.

The Fed's hawkish stance pushed US Treasury yields higher and strengthened the Dollar across major currencies, leaving GBP/USD vulnerable to further losses.

Technical Analysis

GBP/USD shows a clear bearish breakdown on the 4-hour chart, with price trading near 1.3225 after slicing below the important 1.3300–1.3310 support zone. The pair has been making lower highs since early May, and the latest move confirms that sellers remain in control.

The break below 1.3300 is technically significant because this level had repeatedly acted as a floor throughout May and June. Once buyers failed to defend it, downside momentum accelerated, pushing the pair toward fresh multi-week lows. This suggests that the previous consolidation phase has shifted into a continuation of the broader bearish trend.

Immediate resistance is now located around 1.3300–1.3310, where former support is likely to attract fresh selling pressure. A recovery above this level would be needed to ease the bearish bias, but as long as GBP/USD remains below it, rallies are likely to be viewed as selling opportunities.

On the downside, the next key support sits around 1.3180–1.3200. A sustained break below this area would expose deeper losses toward 1.3100, followed by the larger downside target near 1.3000, which aligns with the projected bearish move on the chart.

Momentum remains strongly negative. The sharp decline from the 1.3400 resistance zone shows that sellers are defending lower levels aggressively, while the lack of a meaningful rebound suggests buying interest remains weak.

TRADE RECOMMENDATION

SELL GBP/USD

ENTRY PRICE: 1.3225

STOP LOSS: 1.3310

TAKE PROFIT : 1.3000

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Warren Takunda

Analysts

Warren Takunda, a seasoned finance leader specializing in the Middle East, is a trusted senior analyst with a proven track record. As head of the finance team, he excels in financial planning, analysis, and reporting. Warren's expertise in financial modeling and investment analysis delivers valuable insights to clients.

Rank

Articless

2630

Win Rate

63.41%

P/L Ratio

0.74

Focus on

XAUUSD, GBPUSD, EURUSD

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