GBPUSD – Bears pause after the post-election decline, awaiting the Bank of England’s decision on the widely anticipated 0.25% rate cut

GBPUSD edges higher following Wednesday’s 1.1% drop after the US election, signaling an initial recovery as bears face repeated rejection of further downside.

The failure to break the Fibonacci support at 1.2846 (76.4% of 1.2664/1.3434) on two attempts suggests the formation of a double-bottom pattern (1.2843/34), with the nearby 200DMA (1.2813) also acting as resistance to further downside.

However, additional upward movement is needed to confirm recovery signals, with the primary target at 1.2940 (daily Tenkan-sen) and the more significant psychological barrier at 1.30, near the base of the thick daily cloud (1.2949), where any extended rallies are likely to face resistance.

Bearish daily technical indicators, including negative momentum and price action weighed down by the thick daily cloud, suggest that any rally may be limited, with prolonged consolidation before larger bearish moves resume.

Fundamentals are expected to play a crucial role today, as the Bank of England is set to announce its rate decision. A 25 basis point cut to 4.75% is widely anticipated, and the focus will be on the BoE’s narrative. A hawkish cut could boost the pound, though any rally is likely to remain constrained, as pressure from a stronger US dollar amid the new political outlook is expected to persist.

A firm break of the 1.2843/34 double-bottom (reinforced by the 200WMA) and 1.2813 (200DMA) would signal a continuation of the bearish trend.

Res: 1.2940; 1.2979; 1.3000; 1.3049
Sup: 1.2872; 1.2834; 1.2813; 1.2765