• GBP/USD dipped on Wednesday as traders braced for pivotal policy guidance from the Federal Reserve and the Bank of England.
• Markets expect both central banks to stand pat on rates, placing emphasis on their forward guidance to assess policy direction for the rest of 2026.
• The UK economy is likely to lose momentum in 2026 and 2027 amid Iran war impacts, while inflation is seen staying above the Bank of England target for several more years.
•The Bank of England is under increasing pressure to tackle persistent inflation, with UK short-term futures pricing in a 72% probability of a June rate hike and around 68 basis points of total tightening by the December Monetary Policy Committee meeting.
• Immediate resistance is located at 1.3543(50%fib), any close above will push the pair towards 1.3578(April 27th high)
• Strong support is seen at 1.3473(Daily low) and break below could take the pair towards 1.3450(SMA20).
Recommendation: Good to sell around 1.3500, with stop loss of 1.3560 and target price of 1.3430
