Bank of England holds rates, US regulators propose easing: Pound Sterling vs Dollar slips

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Pound Sterling slides 0.78% today

Highlights

The Bank of England kept rates unchanged, citing ongoing inflation concerns as a key risk for monetary policy.
U.S. regulators proposed easing capital requirements for large and regional banks, aiming to adjust global dollar liquidity and streamline calculations.
GBP/USD faces sustained bearish momentum and trades below key resistance, with a likely weekly range of $1.3260 to $1.3350 and limited upside probability.

Sterling pressured as central banks maintain caution amid US easing

The Bank of England maintained its current interest rate policy due to ongoing inflation risks. On Thursday, U.S. financial regulators, including the Federal Reserve, put forward proposals to ease capital requirements for large and regional banks, which are intended to adjust dollar liquidity in global markets. Public commentary was requested on these proposals, which also involve streamlining risk-based calculations for larger institutions and reducing requirements for smaller banks, though price action has remained under broader selling pressure.

Bearish signals persist as moving averages and momentum diverge

Technical momentum for GBP/USD is strongly bearish, with daily chart signals from MACD and ADX confirming downside dominance. The pair remains well beneath key moving averages, with the SMA-20, SMA-50, and SMA-200 all located above the current price. The Ichimoku Kijun at $1.3360 continues to act as immediate resistance, while both RSI (52.39) and CCI show neutral to mildly positive readings. Stoch RSI displays persistent overbought conditions, hinting at short-term exhaustion and possible reversal, while BBP indicates continued buyer dominance, creating a divergence with weaker momentum indicators; AO is neutral and does not add conviction.

Sideways trading expected as bearish risks outweigh rebound

For the coming five sessions, GBP/USD is expected to remain within a volatility band relative to current levels, with the range projected at $1.3260 to $1.3350. The likelihood of a significant upward move is low (under 20%), so a further decline is more probable. The baseline scenario points to sideways trading within this range. A break below $1.3260 may accelerate selling, while any bullish breakout above $1.3360 would face strong resistance.

Viktoras Karapetjanc, expert at Traders Union, notes that GBP/USD is under strong selling pressure, moving below all key short- and medium-term averages. He sees macro and regulatory factors, like the Bank of England's rate stance and proposed U.S. capital rule changes, maintaining a cautious backdrop. The analyst notes technical conditions remain bearish, despite some neutral momentum signals. "Unless $1.3360 is decisively reclaimed, I expect more softness within the $1.3260–$1.3350 range, with any upside likely limited in the near term."

Earlier, analysts noted that sellers continued to dominate GBP/USD, with technical signals maintaining a broadly bearish outlook. The current market environment reinforces this view and underscores the importance of monitoring $1.3260, as a sustained break below this level could trigger renewed downside momentum.

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.