GBP/USD Price Analysis: Hovering within a trading range above 1.2702 before the upcoming decisions from the Federal Reserve (Fed) and the Bank of England (BoE).

GBP/USD is consolidating within a trading range near 1.2707 as investors adopt a cautious stance before the Federal Reserve (Fed) and the Bank of England (BoE) announce their rate decisions later this week. The Relative Strength Index (RSI) indicates a lack of clear direction in the pair’s movement. Immediate resistance lies at 1.2737, while the next support level is at 1.2674.

As of the early European trading hours on Tuesday, GBP/USD is trading at 1.2709, reflecting a marginal 0.02% decline for the day. The market is in a holding pattern as investors await crucial updates from the Fed and BoE.

The Fed is expected to maintain its benchmark interest rates at the current 5.25–5.50% range during its January meeting, following extensive efforts to control inflation. Conversely, the BoE is likely to keep rates unchanged. Nevertheless, if signs of inflation alleviation emerge, the UK central bank might reconsider lowering rates.

From a technical standpoint, GBP/USD is oscillating within a two-week-old trading range on the four-hour chart, with the pair positioned above the 100-hour Exponential Moving Average (EMA). However, the RSI hovering around the 50 midline suggests a lack of clear direction.

The immediate resistance at 1.2737, marked by the upper boundary of the Bollinger Band, is a crucial level. A decisive breakthrough could propel the pair to the January 26 high of 1.2759, with further upside targets at 1.2786 (January 12 high) and 1.2827 (December 28 high).

On the downside, breaching the 1.2701 round figure may lead to a decline to the lower limit of the Bollinger Band at 1.2676. The pivotal support zone is identified at 1.2601–1.2611, representing the convergence of the psychological mark and the January 2 low. Further selling below this level could expose the December 11 low at 1.2536.

GBPUSD Today Levels