GBP/USD Price Forecast: Climbs to $1.2470 Amid BoE’s Rate Hold and Fed Uncertainty

The GBP/USD pair has exhibited resilience, reversing from a downtrend to become bullish around the $1.2470 level. This change is against a backdrop of the Federal Reserve’s likely delay in interest rate cuts, underscored by strong U.S. economic performance and persistent inflation, which are keeping the dollar robust.

Currently, the dollar is strong, hovering around 106.00, bolstered by U.S. Treasury yields with 2-year and 10-year rates at 4.91% and 4.55%, respectively. The Federal Reserve’s stance on holding rates steady in June has gained more certainty, with probabilities rising to 63.5% against prior expectations.

BoE’s Cautious Approach to Rate Cuts

Conversely, the Bank of England (BoE) signals a conservative approach towards rate cuts, primarily due to ongoing inflation concerns within the UK. This sentiment was echoed by BoE policymaker Megan Greene, who remarked that immediate rate cuts are unlikely, setting a cautious tone ahead of Deputy Governor Sarah Breeden’s speech at an influential summit.

This cautious monetary approach contrasts with the earlier, more aggressive rate cut expectations, now moderating to an end-of-year rate target of 4.75%.

Geopolitical Tensions and the Dollar’s Strength

Furthermore, geopolitical tensions, highlighted by recent Iranian military actions against Israel, have contributed to the dollar’s strength, reaching over five-month highs. Such global uncertainties continue to influence the dollar’s valuation, thereby affecting the GBP/USD dynamics.

GBP/USD Technical Analysis

As of April 15, the GBP/USD pair saw a slight increase, ending the day at 1.24632, up by 0.14%. The currency pair is testing crucial levels, with the immediate pivot point at 1.25208. A breach above this level might push the pair towards higher resistance at 1.26795, 1.27828, and 1.28964, marking potential zones for bullish momentum.

On the downside, the pair finds initial support at 1.23731, with more robust levels at 1.23060 and 1.21924, which could stabilize any downward trends. The 50-day Exponential Moving Average (EMA) positioned at 1.26381 indicates a slight bearish pressure from a technical perspective.

Given the current technical setup, maintaining positions above the pivotal 1.24606 could favour bullish trends, recommending a targeted approach with take profits set at 1.25500 and stop losses at 1.24165 to mitigate risks effectively.