GBP/USD Price Forecast: Likely fall further towards 1.3420
The British Pound (GBP) is down 0.1% to near 1.3500 against the US Dollar (USD) during the European trading session on Wednesday.
The British Pound (GBP) has slipped to around 1.3500 against the US Dollar (USD) in the European trading session on Wednesday, as traders price in a 25 basis points interest rate hike by the Federal Reserve (Fed) in the upcoming policy meeting. The US Dollar Index (DXY) is trading 0.13% higher, indicating a strengthening Greenback.
Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann has backed hiking interest rates early to counter high inflation risks. The Relative Strength Index (RSI) at 48 suggests fading bullish momentum, while support is seen near the lower border of the Rising Channel at 1.3418. Immediate resistance is at the 20-day Exponential Moving Average (EMA) at 1.3537.
The combination of stronger economic data and a hawkish Fed stance suggests limited downside for GBP in the short term, especially versus lower-yielding currencies.
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