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GBP flat lines vs USD as traders await BoE policy update and US PCE Price Index

  • GBP/USD bulls seem hesitant as the Fed’s hawkish tilt and the US-Iran tensions underpin the USD.
  • Bets for two BoE rate hikes in 2026 offer support to the GBP and act as a tailwind for spot prices.
  • Traders also seem reluctant ahead of the BoE decision and the crucial US PCE Price Index data.

The GBP/USD pair struggles to capitalize on a modest Asian session uptick to the 1.3500 neighborhood, though it holds above the 100-day Simple Moving Average (SMA). Spot prices currently trade around the 1.3475-1.3480 region, nearly unchanged for the day, as traders look forward to the Bank of England (BoE) event and the US inflation data for a fresh impetus.

The UK central bank is scheduled to announce its policy decision later today and is expected to keep interest rates on hold. The current market pricing, however, points to a greater possibility of two rate hikes in 2026 amid inflation risks stemming from the war-driven surge in energy prices. Hence, the focus will be on the accompanying policy statement and the post-meeting press conference, where comments from BoE Governor Andrew Bailey will be scrutinized for cues about the interest rate path. The outlook, in turn, will play a key role in influencing the British Pound (GBP).

Traders will further take cues from the US Personal Consumption Expenditures (PCE) Price Index, which should further provide some meaningful impetus to the GBP/USD pair later today. In the meantime, the US Federal Reserve’s (Fed) hawkish tilt, along with the US-Iran stalemate, might continue to act as a tailwind for the US Dollar (USD) and cap the upside for the currency pair. The Fed’s decision to keep interest rates unchanged on Wednesday saw the highest number of dissents since 1992, with three policymakers voting against the accommodative tone in the policy statement.

Traders were quick to reduce bets on any further easing by the Fed in 2026; instead, they are now pricing in over a 10% chance of a rate increase by the year-end. On the geopolitical front, US President Donald Trump rejected Iran’s new proposal to end the two-month conflict and reiterated that there will be no peace deal with the Islamic Republic unless it agrees to give up the nuclear program. Trump further added that the naval blockade of Iranian ports will continue, which keeps geopolitical risks in play. This, in turn, favors the USD bulls and should keep a lid on the GBP/USD pair.

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GBP/USD Price Trades sideways around 1.3500 ahead of Fed-BoE rate decisions

  • GBP/USD wobbles around 1.3500 as the US Dollar consolidates in the countdown to Fed-BoE policy announcements.
  • The Fed is expected to warn of upside inflation risks after leaving interest rates unchanged.
  • Investors expect the BoE to hold interest rates steady at 3.75%.

The GBP/USD pair is broadly sideways around 1.3500 during the European trading session on Wednesday. The Cable consolidates as investors await monetary policy announcements by the Federal Reserve (Fed) and the Bank of England (BoE).

The Fed is anticipated to leave interest rates unchanged in the range of 3.50%-3.75% in its monetary policy announcement at 18:00 GMT, according to the CME FedWatch tool. In the monetary policy statement, the Fed is expected to warn about de-anchored inflation projections and growing economic risks amid higher oil prices due to prolonged Strait of Hormuz closure.

Ahead of the Fed’s policy meeting, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 98.70.

On Thursday, the BoE is expected to hold interest rates steady at 3.75%, with an 8-1 majority. In an event at the International Monetary Fund (IMF) this month, BoE Governor Andrew Bailey said the war has resulted in a “big negative shock” to the economy; however, there is no rush for any monetary policy adjustment.

GBP/USD technical analysis

GBP/USD trades flat at around 1.3500, holding a modest bullish bias as it sits above the 20-day Exponential Moving Average (EMA) at 1.3470 and the 38.2% Fibonacci retracement at 1.3432.

The Relative Strength Index (RSI) at 55.4 leans slightly positive, suggesting buyers retain the upper hand while upside traction remains gradual.

On the topside, immediate resistance is aligned at the 50.0% Fibonacci retracement at 1.3515, with further barriers at the 61.8% level at 1.3599, followed by 1.3718 and 1.3870. On the downside, initial support is seen at the 20-day EMA at 1.3470, ahead of the 38.2% retracement at 1.3432; a deeper pullback would expose the 23.6% level at 1.3328 and the structural floor near 1.3161.

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GBP/USD – Hovers around nine-day EMA near 1.3500

  • GBP/USD may appreciate toward the two-month high of 1.3599.
  • The 14-day Relative Strength Index near 56 signals positive momentum without indicating overbought conditions.
  • The pair is testing the lower boundary of the ascending channel around 1.3510.

GBP/USD inches higher after registering little losses in the previous day, trading around 1.3520 during the Asian hours on Wednesday. The technical analysis of the daily chart indicates a potential for a bearish reversal as the pair is hovering around the lower boundary of the ascending channel pattern.

However, the GBP/USD pair maintains a modest bullish bias as it holds above the nine-day Exponential Moving Average (EMA) and the 50-day EMA. The clustering of these averages below the spot suggests a supportive backdrop after the recent advance, while the 14-day Relative Strength Index around 56 hints at positive but not overextended momentum, leaving room for further gains while the pair remains under nearby resistance.

The GBP/USD pair may rise toward the primary barrier at the two-month high of 1.3599, recorded on April 17. Further advances would support the pair to explore the region around the upper boundary of the ascending channel near the 1.3869, the highest level since September 2021, reached on January 27.

On the downside, the GBP/USD pair is testing the lower boundary of the ascending channel around 1.3510. aligned with the nine-day EMA of 1.3509. Further support lies at the 50-day EMA at 1.3440. A successful break below this confluence support zone would expose the five-month low of 1.3159, recorded on March 31, followed by the 1.3010, the lowest since April 2025, which was recorded in November 2025.

GBP/USD: Daily Chart

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.02%-0.03%-0.02%-0.01%0.11%0.14%-0.11%
EUR0.02%-0.03%0.02%0.00%0.11%0.18%-0.08%
GBP0.03%0.03%0.02%0.02%0.13%0.18%-0.07%
JPY0.02%-0.02%-0.02%-0.01%0.13%0.18%-0.04%
CAD0.01%-0.00%-0.02%0.01%0.14%0.18%-0.07%
AUD-0.11%-0.11%-0.13%-0.13%-0.14%0.05%-0.25%
NZD-0.14%-0.18%-0.18%-0.18%-0.18%-0.05%-0.26%
CHF0.11%0.08%0.07%0.04%0.07%0.25%0.26%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

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Trade of The Day – GBP/JPY – Long GBP/JPY at market price Target: 215.85

Facts:

The pair reached the lower limit of 1:1 structure at 215.14 Main trend on the pair remains upward

Recommendation:

Trade: Long GBPJPY at market price Target: 215.85, 216.30 Stop: 214.90

Opinion:

Looking at GBPJPY chart, one can observe that the price reached the key technical support today. This support is marked with the lower limit of 1:1 structure (green rectangles), as well as 200-period moving average. In addition the bullish candlestick pattern – pin bar appeared on the H1 chart. Should buyers manage to hold the price above the support at 215.14, another upward impulse may be on the cards. We recommend taking a long position on GBPJPY at market price with two targets: 215.85 and 216.30 We recommend placing a stop loss order at 214.90.

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EUR/GBP flat lines above 0.8650 as markets await BoE, ECB rate decisions

  • EUR/GBP holds steady around 0.8660 in Tuesday’s early European session. 
  • BoE is expected to hold rates steady despite inflation risk. 
  • Markets anticipate the ECB holding the key rates on Thursday.

The EUR/GBP cross trades on a flat note near 0.8660 during the early European trading hours on Tuesday. Traders prefer to wait on the sidelines ahead of the Bank of England (BoE) and the European Central Bank (ECB) interest rate decisions later on Thursday. 

The BoE is likely to keep interest rates steady at 3.75% at its April policy meeting on Thursday as policymakers buy time to assess the risks stemming from the energy crunch. BoE governor Andrew Bailey said in the last meeting that, given the UK’s weak labor market and a lack of corporate pricing power, there was no immediate need to change policy. 

However, a UK economist at JPMorgan pointed to strong business activity readings and expansion in Gross Domestic Product (GDP) in February as underscoring the inflation risks.  “We expect the BoE to create space for a potential near-term hike, with incoming data determining whether and when it will act,” he said. 

The ECB is expected to keep its key interest rates unchanged at its next meeting on Thursday. While rates are expected to hold, markets anticipate the ECB may signal future hikes to combat persistent inflation. All eyes will be on ECB President Christine Lagarde’s press conference after the meeting for clues about the outlook for rates.

Goldman Sachs analysts see the ECB delivering two 25 basis point (bps) rate hikes in the months ahead. The first being in June, with the next in September, in bringing the deposit rate back to 2.50%.

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GBP/JPY slides to 215.25 after BoJ’s hawkish pause; downside seems limited

  • GBP/JPY retreats further from a multi-year top as the BoJ’s hawkish outlook boosts the JPY.
  • A 6-3 vote split and upward revision of inflation forecasts keep BoJ rate hike bets on the table.
  • Bets for two BoE rate hikes by late 2026 should support the GBP and limit losses for spot prices.

The GBP/JPY cross attracts some sellers during the Asian session on Tuesday and, for now, seems to have snapped a two-day winning streak to its highest level since January 2008, just above the 216.00 mark touched the previous day. Spot prices touch a fresh daily low, around the 215.25 region, amid a goodish pickup in demand for the Japanese Yen (JPY) following the Bank of Japan (BoJ) policy decision.

As was widely expected, the Japanese central bank left the short-term interest rate unadjusted at 0.75%. The JPY, however, gains strong positive traction in reaction to a hawkish vote split, with three board members voting for a rate hike. Furthermore, the BoJ delivered a significantly more hawkish inflation outlook amid elevated Crude Oil prices and acknowledged that the Iran war is clouding the economic growth trajectory.

Meanwhile, Japan’s Finance Minister Satsuki Katayama said that Crude Oil volatility is feeding into FX markets and affecting the broader economy. Katayama also warned that authorities were ready to take decisive action against speculative activity, fueling intervention fears and underpinning the JPY. Moreover, a firmer US Dollar (USD) weighs on the British Pound (GBP), which contributes to the GBP/JPY pair’s intraday slide.

Any meaningful GBP downfall, however, seems elusive in the wake of rising bets for two Bank of England (BoE) interest rate hikes by late 2026. Furthermore, investors remain worried that Japan’s economy will come under substantial strains as the risk to energy supplies remains due to continued disruptions to shipping through the Strait of Hormuz. This, in turn, could support the GBP/JPY cross and help limit losses.

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GBP softens as markets await Fed and BoE rate decisions

  • GBP/USD drifts lower to near 1.3525 in Tuesday’s early Asian session.
  • Fed is widely expected to leave rates unchanged at 3.50%–3.75% at its April meeting on Wednesday.
  • The BoE is likely to keep rates on hold on Thursday. 

The GBP/USD pair trades in negative territory around 1.3525 during the early Asian session on Tuesday. The Pound Sterling (GBP) softens against the US Dollar (USD) as traders prefer to wait on the sidelines ahead of the Federal Reserve (Fed) and the Bank of England (BoE) later this week. 

The Fed is likely to keep the federal funds rate between 3.50% and 3.75%, where it has sat since January. Deutsche Bank analysts noted a repricing of Fed policy toward a more hawkish stance, driven by persistent oil-related inflation. 

Traders will closely watch Jerome Powell’s press conference after the meeting for fresh impetus. Any hawkish comments from Fed officials could provide some support to the Greenback and create a headwind for the major pair. 

Markets expect the UK central bank to keep interest rates on hold on Thursday, and traders will be watching for any signs ‌it is moving towards raising rates. Analysts see the UK economy as particularly vulnerable to the rise in energy prices caused by the war due to the country’s heavy use of natural gas.

“Our baseline forecast assumes Bank Rate will remain on hold for the rest of the year,” said Edward Allenby, senior UK economist at Oxford Economics. “The committee will have more information about how the energy shock is feeding through to the economy by the end-July meeting,” Allenby added.  

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GBP/JPY slips as UK political risk pressures Pound, Yen weakness limits losses

  • GBP/JPY trims intraday gains as the British Pound softens on UK political uncertainty.
  • Markets await the BoE and BoJ monetary policy decisions due this week.
  • Technicals remain bullish above key SMAs, though momentum shows signs of cooling.

GBP/JPY gives back part of its earlier gains on Monday as the British Pound (GBP) comes under pressure following reports that UK Prime Minister Keir Starmer will face a parliamentary vote on a possible probe into whether he misled lawmakers over the appointment of Peter Mandelson as ambassador to the United States.

However, the downside remains limited as the Japanese Yen (JPY) continues to underperform most of its major peers, with elevated Oil prices weighing on the currency given Japan’s heavy reliance on imported energy.

At the time of writing, GBP/JPY is trading around 215.67, easing slightly after hitting 216.06, its highest level since January 2008, while the wide interest rate differential between the Bank of England (BoE) and the Bank of Japan (BoJ) keeps the broader bias tilted to the upside.

Attention now turns to upcoming monetary policy meetings due this week, with both the BoE and the BoJ widely expected to hold rates steady as policymakers assess the impact of rising Oil prices on inflation and economic growth.

The BoJ’s slow pace of policy normalization is likely to keep the Yen on the defensive, although lingering intervention risks could limit further weakness amid repeated warnings from Japanese officials, with USD/JPY hovering close to the 160 mark.

In the daily chart, GBP/JPY keeps a bullish near-term bias as it holds well above both the 21-day simple moving average (SMA) at 213.60 and the 50-day SMA at 212.24. The positive but moderating Relative Strength Index (RSI) around 65 and a still-positive Moving Average Convergence Divergence (MACD) histogram hint that upside momentum persists, though the pace of the advance is losing some steam as the cross consolidates near recent highs.

On the downside, initial support is seen at the 21-day SMA at 213.60, with a deeper pullback likely finding additional demand near the 50-day SMA at 212.24. As long as GBP/JPY holds above these moving averages, the broader bullish structure remains intact, and any dips toward this support band may be treated as corrective rather than signaling a sustained reversal.

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

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD-0.14%-0.08%-0.06%-0.43%-0.49%-0.51%-0.03%
EUR0.14%0.08%0.09%-0.28%-0.32%-0.35%0.13%
GBP0.08%-0.08%0.00%-0.38%-0.43%-0.45%0.05%
JPY0.06%-0.09%0.00%-0.35%-0.42%-0.46%0.09%
CAD0.43%0.28%0.38%0.35%-0.06%-0.10%0.41%
AUD0.49%0.32%0.43%0.42%0.06%-0.01%0.47%
NZD0.51%0.35%0.45%0.46%0.10%0.01%0.49%
CHF0.03%-0.13%-0.05%-0.09%-0.41%-0.47%-0.49%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).