• The GBP/USD outlook suggests the Bank of England may be nearing a pause.
• Nearly half of the BoE policymakers were ready to keep rates unchanged.
• US claims rose to 226,000, beating the forecast of 221,000.

The GBP/USD outlook suggests the Bank of England could be nearing the end of its current easing cycle. As a result, the pound rallied despite a rate cut. Meanwhile, the dollar eased after more downbeat employment numbers. 

The Bank of England lowered borrowing costs by 25 bps on Thursday. However, it was a difficult vote where nearly half the policymakers were ready to keep rates unchanged. Initially, market participants had expected a dovish meeting, where officials would signal more rate cuts to come. However, the recent spike in inflation has changed a lot. However, Bailey said the hike might only be temporary.

“It remains important that we do not cut the bank rate too quickly or by too much,” Bailey told a press conference after the decision, highlighting that the rise in inflation was expected to be short-lived.

“We stand ready to adjust our course if we see shifts in the balance of risk to the medium-term outlook for inflation.”

Meanwhile, the dollar eased after data revealed an increase in unemployment. Claims rose to 226,000, beating the forecast of 221,000. The report increased concerns about the US labor market, which has slowed down significantly due to Trump’s tariffs.
 

GBP/USD key events today

Market participants do not expect any key releases today. Therefore, the pair will likely extend the previous session’s move.
 

GBP/USD technical outlook: Bulls charge past 1.3402, eye 1.3600
 

(Click on image to enlarge)

GBP/USD 4-hour chart
 

On the technical side, the GBP/USD price has broken above the 1.3402 key level, strengthening the bullish bias. The price now trades well above the 30-SMA, with the RSI in the overbought region, suggesting solid bullish momentum.

Sentiment shifted when the previous decline paused near the 1.3151 support level. Here, the price made a bullish engulfing candle, signalling a likely reversal. Soon after this, the price broke above the SMA, showing bulls had taken charge. 

Given the new bullish bias, the price might keep climbing after the 1.3402 break. Therefore, GBP/USD might soon reach the 1.3600 resistance level. Moreover, the bullish bias will remain intact as long as the price trades above the SMA and the RSI is above 50.

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