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>>GBP/USD lingers at the pivotal 1.3500 level as uncertainty clouds the BoE‑Fed divergence debate

GBP/USD lingers at the pivotal 1.3500 level as uncertainty clouds the BoE‑Fed divergence debate

crypthub

about 10 hours ago

Market Stalemate at 1.3500

The GBP/USD pair hovers around 1.3500, a psychological barrier that now reflects indecision. Price action shows tight consolidation with low volatility, while 50‑ and 200‑day averages converge, offering no clear breakout direction. Mixed US and UK data have blurred the earlier BoE‑Fed divergence narrative. Traders are waiting for a catalyst.

Evolving Central Bank Signals

BoE faces a split between stubborn services inflation and weak retail sales, prompting a more gradual easing outlook. Fed officials stress “higher for longer” as inflation stays sticky, pushing potential cuts to Q4 2025. This convergence removes the previously expected policy gap and supports the dollar’s yield advantage. The lack of decisive hawkish or dovish moves keeps GBP/USD range‑bound.

Broader Influences and Sentiment

Geopolitical safe‑haven flows, energy price swings, and equity‑market risk appetite offset each other, further limiting directional pressure. COT data show reduced extreme long positions on the pound and falling option‑implied volatility, signalling caution. A clear shift in UK or US fundamentals or decisive central‑bank guidance would be needed to break the impasse. Until then, 1.3500 remains the focal point.