GBP/USD technical analysis: Flat trading below $1.3448 resistance as seller pressure persists

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Pound Sterling vs Dollar down 0.5% today

Highlights

The Bank of England increased its Bank Rate by 25 basis points to 4% in an 8-1 vote, the first hike since August 2023.
UK two-year gilt yields rose to 28 basis points above equivalent U.S. Treasuries, altering cross-border flow dynamics and market interest.
GBP/USD trades below key moving averages with bearish momentum, expected to range from $1.3322 to $1.3456, with higher probability of declines.

Rate hike draws investor focus as sterling struggles on policy shift

The Bank of England raised its Bank Rate by 25 basis points to 4% in an 8-1 vote on November 5, marking its first hike since August 2023, according to Tradingnews. This move increased the cost of borrowing and raised UK two-year gilt yields to stand 28 basis points above comparable U.S. Treasuries, potentially drawing investor interest and impacting foreign exchange flows. FXStreet reported that the British Pound faced pressure as it struggled to sustain gains above 1.3500 against the US Dollar ahead of the policy announcement, with market participants reacting cautiously to the central bank’s shift.

Downside momentum persists amid oversold signals and resistance caps

On the technical front, GBP/USD is trading below its MA-20 ($1.3448) and MA-50 ($1.3466) on the hourly chart, as well as below the MA-200 ($1.3406) on the daily timeframe. The Ichimoku Kijun at $1.3448 acts as the nearest resistance level. Daily support sits at $1.3322, while resistance is set at $1.3456. Momentum indicators are negative, with both MACD and ADX in sell territory. RSI, Stoch RSI, and CCI are all in their respective oversold zones, indicating selling exhaustion. Bull/Bear Power is negative at -0.0022, aligning with continued intraday seller dominance. The Awesome Oscillator also supports a downside bias.

Range-bound outlook as downside risks dominate on volatility

Over the short term, GBP/USD is expected to remain largely range-bound, with price action projected between $1.3322 and $1.3456 over the next two to three trading days. While the probability of an upward move is very low, the likelihood of a downside extension remains high, reflecting the current volatility band relative to prevailing levels. Should the price break above $1.3448, a recovery toward the range top is possible. Conversely, a move below $1.3322 would open the door for further downside extension.

Viktoras Karapetjanc, analyst at Traders Union, believes GBP/USD remains under short-term pressure following the Bank of England's rate hike. He sees rising gilt yields supporting the Pound’s long-term profile, though intraday sentiment still favors sellers. Technicals show persistent downside momentum and oversold readings, but the macro backdrop offers potential support if risk appetite improves. "If GBP/USD holds above $1.3322, I see scope for stabilization and a possible rebound as investors respond to policy tightening with fresh inflows."

Earlier, analysts noted that GBP/USD was exhibiting sustained bullish momentum, supported by technical trend confirmation and broader dollar weakness. The current price action, however, highlights a shift toward downside risk, suggesting traders should closely monitor the $1.3322 support level for signs of further losses.

Source of Data: GBP Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.