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A Rate Cut Is Inevitable, and the Pound May Fall to 1.3000
Forex
Summary:
Today, the Bank of England (BOE) is scheduled to release its latest monetary policy decision, with prevailing market expectations indicating a potential interest rate cut, which may exert downward pressure on the British pound.
Sell
TradingGBPUSD
EXP
1.33678
Entry Price
1.30200
TP
1.34600
SL
1.33926 +0.00197 +0.15%
0
Point
Flat
1.30200
TP
CLOSING
1.33678
Entry Price
1.34600
SL
Fundamentals
In today's BOE monetary policy meeting, market expectations widely anticipate a rate cut from 4.00% to 3.75%, driven by the unexpected decline in UK November inflation to 3.2%. Consequently, the market has nearly fully priced in a rate reduction. If the BOE proceeds as expected, the immediate result will be a contraction in the nominal yield spread of GBP. More critically, market attention will shift to the central bank's forward guidance—if the statement emphasizes a "cautious, one-time, or limited" rate cut, the pound may quickly stabilize or rebound. Conversely, if the statement conveys a more dovish outlook, the pound could face sustained downside pressure.
Ultimately, the market's reaction today depends not only on whether the rate is cut but also on the voting margin, tone of the statement, and subsequent release of the dot plot or economic projections, which will determine the medium- to short-term trajectory of the GBPUSD exchange rate.
Technical Analysis
Technically, the GBPUSD is currently trading around 1.3370 with sideways consolidation. The key resistance zone lies between 1.3405 and 1.3455; a significant breakout above this range, sustained by increased volume, could target a rally toward 1.3600. On the downside, the critical support levels are established between 1.3300 and 1.3200; a breach below this support may accelerate a retreat toward 1.3100 to 1.3000.
Short-term technical indicators indicate that the 4H RSI has shifted from neutral to bearish, while the MA10 has crossed below the MA20, creating a death cross that further confirms bearish momentum. Should dovish signals emerge from fundamental news accompanied by rising volume, the technical setup would quickly validate bearish strength. Conversely, if policymakers maintain a cautious tone despite signaling rate cuts, it could trigger a near-term oversold bounce.
Trading Recommendations
Trading Direction: Sell
Entry Price: 1.3370
Target Price: 1.3020
Stop Loss: 1.3460
Valid Until: December 31, 2025 23:00:00
Support: 1.3300, 1.3200
Resistance: 1.3405, 1.3455
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