
GBP/USD remains in consolidation mode, confined to a narrow trading band as softer UK PMI data failed to shift sentiment or alter the Bank of England’s policy outlook. Sterling sits around the 1.35 handle, with dips supported near key moving averages but rallies capped by short-term resistance.
Market Drivers
- Data Impact: UK PMIs came in softer across the board, with weaker input and output prices. While these metrics matter for BoE inflation monitoring, they had little immediate effect on rate expectations.
- BoE Rhetoric: Chief Economist Huw Pill, one of the more hawkish MPC members, noted he is now more comfortable with inflation risks than earlier in the year. This marks a marginally dovish shift but has not altered forward pricing.
- Dollar Influence: Since the Fed’s September rate decision, the dollar has been in recovery mode, and GBP/USD has tracked this bias rather than domestic fundamentals.
Technical Landscape
- Support: 1.3472/84 – zone defined by the 55- and 100-DMAs. These have consistently cushioned downside tests.
- Resistance: 1.3547/65 – capped by the 100- and 200-hour MAs. This cluster remains the near-term ceiling.
- Momentum: Daily RSI is neutral, reflecting the rangebound nature of trade. MACD is flat, showing no conviction for a breakout.
Outlook
Sterling’s path remains dictated by USD moves. A sustained break below 1.3470 would expose 1.3400 (daily cloud top), while a close above 1.3565 could encourage upside momentum toward 1.3660. For now, expect continued sideways action around 1.35.