**GBP/USD Price Forecast: Pound Slides to 1.3105 as BoE Rate Cut Odds Surge**
*By TradingNews.com*
The British pound has experienced a pronounced decline against the US dollar, sinking to a multi-week low near 1.3105. The move comes amidst mounting market speculation that the Bank of England (BoE) may pivot towards a more dovish monetary policy stance. As traders recalibrate their expectations, the GBP/USD currency pair has become a focal point for forex investors aiming to capitalize on shifting central bank policies and macroeconomic forces.
### Market Sentiment: Surge in BoE Rate Cut Bets
The primary catalyst behind sterling’s latest slide is a substantial surge in expectations that the BoE will soon ease monetary policy. Recent economic data releases have reinforced the argument for a rate cut, driving bearish momentum in GBP/USD.
**Key drivers for heightened BoE dovishness:**
– **Weakening UK economic growth:** Recent GDP and manufacturing reports indicate stagnation, renewing fears of a slowdown.
– **Softening inflation data:** Headline and core inflation measures have shown signs of cooling off, easing pressure on the BoE to maintain restrictive rates.
– **Labor market uncertainty:** Wage growth and employment trends have started to moderate, further reducing the need for aggressive policy tightening.
With inflation drifting closer to the BoE’s 2 percent target and economic growth faltering, swap markets are now pricing in an increased probability of a rate cut at the central bank’s upcoming policy meetings. This dovish re-pricing has weighed sharply on the pound’s value.
### US Dollar Strength Adds Pressure
The pound’s woes have been exacerbated by the broad resurgence of the US dollar. Investors continue to seek dollar-denominated assets on the back of resilient US economic data and hawkish messaging from the Federal Reserve. The divergence between the BoE’s dovish outlook and the Fed’s relatively more hawkish stance is underpinning sustained downward pressure on GBP/USD.
**Contributing factors to dollar strength:**
– **Solid US growth and labor market figures:** The US continues to print robust non-farm payrolls and GDP figures.
– **Fed’s ‘higher for longer’ narrative:** Federal Reserve officials have signaled reluctance to cut interest rates in the near term, solidifying the greenback’s appeal.
– **Safe-haven flows:** Persistent geopolitical concerns and financial market volatility are funneling investor capital into the dollar.
As a result, the GBP/USD pair has come under two-pronged pressure — softening prospects for sterling and renewed strength for the greenback.
### Key Technical Levels: GBP/USD in Focus
Analysts are watching several crucial technical levels as GBP/USD attempts to find support after its latest leg lower.
– **Immediate support:** The 1.3100 region, a psychological and technical anchor, is the primary support area in play.
– **Further downside targets:** Below 1.3100, bears may eye the 1.3050 and 1.3000 marks, both of which have acted as pivot points during previous selloffs.
– **Resistance zones:** On the upside, short-term resistance is clustered around 1.3150–1.3200, where sellers have recently defended against pound rallies.
The prevailing short-term bias remains bearish while GBP/USD trades below key moving averages, and momentum indicators such as Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) continue to point south.
### Economic Data and Fundamental Backdrop
The market’s dovish outlook for the BoE has been cemented by a series of lackluster UK economic releases. Investors are scrutinizing every data print for signals on future policy direction, and recent figures have tipped the balance in favor of easing.
**Latest UK economic highlights:**
– **Gross Domestic Product (GDP):** Growth numbers have underwhelmed, with recent prints stalling and showing minimal expansion.
– **Inflation (CPI):**
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