GBPUSD – Recovery loses momentum ahead of BoE rate decision

Cable edged lower in early European trading on Wednesday, pressured by disappointing UK data, as July’s Construction PMI dropped to its lowest level since 2020. Despite the dip, the pair remains locked within a narrow range for the third consecutive session, with long-legged Doji candles reflecting strong near-term indecision.

The broader technical outlook remains bearish, with daily moving averages in a negative configuration. Notably, recent bear crosses between the 10/100DMA and 30/55DMA, along with 14-day momentum holding in negative territory, reinforce the view that the current recovery may be losing steam before sellers regain control.

The recent range top near 1.3330—bolstered by the descending 10DMA—should cap upside attempts and protect key resistances at 1.3348 (100DMA) and 1.3375 (broken 38.2% Fibo of the 1.2708–1.3788 rally).

A clear break below interim support at 1.3248 (near the 50% Fibo) would open the path toward 1.3141 (Aug 1 three-month low) and 1.3120 (61.8% Fibo).

All eyes are now on Thursday’s Bank of England policy decision, where a widely anticipated rate cut to 4.00% from 4.25% could add further downside pressure on the pound.

Res: 1.3330; 1.3348; 1.3375; 1.3397
Sup: 1.3248; 1.3185; 1.3141; 1.3120