Pound Rallies as BoE Cuts with Caution

• BoE cuts rates by 25bps to 4% in a tight 5–4 vote. 
• Sterling gains as traders scale back rate cut expectations. 
• Market now sees only a 50% chance of another cut by November. 
• GBPUSD rallies toward 1.34, eyes resistance near 1.3510. 
• Price action trapped between 21-day and 50-day MAs; key trendline at 1.3462 in focus. 

The Bank of England cut interest rates by 25 basis points to 4.00%, as widely expected. However, the decision came with a close 5-4 vote split—five members favored a cut, while four opted to hold.

This narrow margin has had an outsized impact on market pricing. Traders have scaled back expectations for further rate cuts this year, now assigning just a 50% probability of another cut by November.

The British pound strengthened in response, with GBPUSD pushing toward 1.3400 following the announcement. Traders now await clarity on whether the Bank’s easing cycle is on pause, or merely delayed.

Technical Outlook: Key Levels in Play for Cable

GBPUSD is currently trading between the 21-day and 50-day simple moving averages, with a downward-sloping trend line from July 1, 2025, capping price action near 1.3462.

Cable bulls are eyeing a breakout above this trend line. A clean move higher would take prices above the 50-day SMA at 1.3500, setting the stage for a push toward near-term resistance at 1.35887—a level that may confirm a bullish trend shift.

Cable bears, on the other hand, are watching for rejection at the trend line and a daily close below the 21-day SMA at 1.3390. A sustained move lower would expose the 2025 low at 1.31412 as the next key support.

Bloomberg’s FX model forecasts a 75% chance that GBPUSD will trade within the 1.3261 – 1.3569 range, using current levels as a base, over the next one-week period.