- The GBP/USD was pushed back to the 1.3000 handle on Tuesday.
- The market will take a second blow from Fed and BOE installments.
- The Fed is expected to stabilize until April. This is because we also saw Boe as stable.
On Tuesday, GBP/USD experienced light trading but managed to edge back into the 1.3000 range, reaching a fresh 19-week high ahead of key interest rate decisions from both the Federal Reserve (Fed) and the Bank of England (BoE). While the Fed is largely expected to keep rates unchanged this week, investors will closely watch the Federal Open Market Committee’s (FOMC) updated interest rate projections.
The Fed’s latest policy decision is scheduled for Wednesday. According to the CME’s FedWatch Tool, market expectations suggest the Fed will maintain current rates for the next two meetings, with a potential quarter-point rate cut anticipated in June. However, the FOMC’s revised interest rate forecasts, set to be released this week, could significantly impact market sentiment if they diverge from current expectations.
Meanwhile, the BoE’s rate decision on Thursday will also be in focus, though it may not carry as much market weight as the Fed’s midweek announcement. Following the BoE’s rate cut last month, the UK’s central bank is expected to hold rates at 4.5% with a 7-to-2 vote, as two dovish policymakers may push for another quarter-point reduction.
GBP/USD forecast
GBP/USD is testing into its third straight week of gains, clipping back into the 1.3000 handle for the first time since last November. The pair is now trading 7.5% above January’s multi-month low of 1.2100. Near-term price action is still tilted firmly in favor of Cable bulls, however GBP/USD may have overextended itself as technical oscillators remain pinned deep in overbought territory.
Daily GBP/USD Chart Insights
