The Bank of England cut its benchmark rate by 25 basis points, deviating from the expected unanimous decision by voting 7-2-0. Swati Dhingra and Dave Ramsden preferred a 50 basis point cut, while Catherine Mann and Huw Pill voted to maintain rates at 4.50%.

This unexpected dissent caused the GBPUSD to spike from 1.3241 to 1.3344 before settling back towards session lows. The BOE maintained its guidance for a “gradual and careful” approach to policy easing. Markets were more focused on the vote distribution, revealing a divided Monetary Policy Committee.

Technical Analysis of GBPUSD

From a technical standpoint, GBPUSD experienced an intraday reversal favouring sellers. It moved back toward the day’s low at 1.3241, and a potential break below 1.3233 could lead towards a support area between 1.32017 and 1.32067. A further move below might target the 38.2% retracement of the April rally at 1.31603.

With prices falling below the 100- and 200-hour moving averages, sellers have short-term control. A break of the mentioned downside targets is required to confirm and extend the bearish trend.

The Monetary Policy Committee’s decision was less unified than markets had anticipated, rattling assumptions that rate normalisation would follow a predictable timeline. With a majority favouring a moderate reduction, but others pushing either for steeper cuts or holding steady, the vote breakdown signalled competing views about inflation threats. That divergence—combined with the size of the easing—sparked a brief rally in sterling, though the move proved short-lived. It appears that traders priced in the rate cut swiftly, only to hedge back on concerns that consensus around future cuts is far from settled.

Seen from a trading perspective, the GBPUSD reaction told a clear story. Initial bids followed the rate announcement, jumping on the surprise dissent. But the enthusiasm faded quickly. The pair returned to earlier levels and drifted lower, pointing to restrained conviction in buying beyond headlines. This type of price behaviour often signals uncertainty in forward policy projections more than a clear belief that sterling will hold its strength in the near term.

Market Reaction and Outlook

Technically speaking, the inability of the pair to hold above immediate resistance was a tell. When candles fail to sustain intraday highs and break back below moving averages—the 100- and 200-hour in this case—downside attempts become more plausible. We’ve seen this before. Price losing those averages in this context should prompt a fresh look at lower retracement levels. Eyes now shift to the zone just below 1.3210. If that pocket gives way, it’s not a stretch to anticipate a retest of the 38.2% Fibonacci retracement level, mapped out near 1.3160. That’s where we’d expect some resting bids, but if selling momentum carries through, those could quickly be absorbed.

We should remind ourselves that moments like these, where market direction hinges on subtle vote shifts and guidance language, often leave charts more informative than statements. Recent candle structure supports short-term bearish pressure. Any sustained break of 1.3200 should put us on alert for further weakness. Sellers appear to be gaining comfort pressing the pair lower, though conviction ultimately needs candle closes beneath support to shift the balance more decisively.

In this setting, pressure builds on positioning. The rejection at the highs, followed by a return to the day’s low, is the type of move that should be respected. Close attention must now be paid to the next lower levels and the pace at which price approaches them. A stall or reversal near retracement support could revive the bulls, but only with volume and confirmation. Until then, the control tilts toward the sellers, who seem keen to test deeper waters.

Create your live VT Markets account and start trading now.