During the early European session on Friday, the GBP/USD pair traded on a weaker note around 1.2620. The decline in Pound Sterling (GBP) is fueled by increasing speculation that the Bank of England (BoE) will initiate a rate-cut cycle this year. Market sentiment is firmly positioned towards anticipating the first rate cut in August, with expectations of up to three quarter-point interest rate reductions throughout the year.
From a technical perspective, the bearish sentiment persists for GBP/USD, with the major pair positioned below the critical 50-period and 100-period Exponential Moving Average (EMA) on the four-hour chart. Additionally, the Relative Strength Index (RSI) remains below the 50 midline, indicating continued downward momentum and favoring further decline.
The immediate resistance level for GBP/USD is identified around the 1.2645–1.2650 region, where the upper boundary of the Bollinger Band coincides with the 50-period EMA. Any sustained upward movement above this level may expose the 100-period EMA at 1.2677, with additional resistance observed at the March 18 high of 1.2746, followed by the psychological round mark of 1.2800.
Conversely, initial support for the major pair is situated at the lower limit of the Bollinger Band in the 1.2600–1.2605 zone. A decisive breach below this level could open the path towards the March 22 low at 1.2575, followed by the February 14 low at 1.2535, and ultimately the psychological level of 1.2500.
