The GBPUSD rebound has stalled near the broken trend-line and the 200-hour moving average at approximately 1.35136. Sellers managed to push the price below the 100-hour moving average at around 1.3480.

Attention has now turned to key technical levels. Immediate resistance is at the 100-hour MA of 1.3480 and the 200-hour MA at 1.3513. Crucial support lies between 1.3455 and 1.3473, with the 38.2% retracement from May to June at 1.3455. A breach below 1.3455 could lead to further declines towards a level at 1.3414 and potentially 1.33869.

Uk Inflation And Economic Concerns

In the UK, headline inflation slipped to 3.4% YoY in May, down from 3.5%. Despite this, the Bank of England maintained the Bank Rate at 4.25% with a 6-3 vote. The minutes indicated slower wage growth. UK retail sales volumes dropped by 2.7% in May, the largest decline since December 2023, causing concerns over economic growth and influencing GBPUSD movements.

This setup paints a picture of a market at a turning point. The effort to move GBPUSD higher ran out of steam below the 200-hour moving average, which has now started to act as a ceiling for price movement. The failed attempt to reclaim that level has since invited pressure from sellers, who successfully drove the pair underneath the 100-hour moving average. That sort of rejection typically hints at growing hesitation from buyers and provides momentum to those betting on further weakness.

The area between 1.3455 and 1.3473 has a dense collection of technical interest, and it has already proven itself as a zone that draws in participation. Not only is this the region of a common Fibonacci retracement, but there’s also a psychological element—three consecutive rejections below that zone could lead to a shift from dip-buying to position-flattening, especially if the pair can’t regain the 100-hour moving average. If we break through and close below the 1.3455 line, then previous lows near 1.3414 and even 1.3386 are likely to attract attention from systematic sellers.

Bailey and the majority on the policy board kept rates unchanged, despite inflation edging back mildly. That 6-3 vote hints at growing internal disagreement, with a third of the panel likely feeling that quicker easing runs the risk of misreading underlying persistence in wages. However, such sentiments were softened by minutes that pointed to slower wage growth—important for those trying to divine the course of monetary policy.

Market Dynamics And Future Outlook

Broadly, the rate hold wasn’t a surprise, but it brought no firm message around what’s next, and that ambiguity tends to provide fertile ground for volatility. Especially when retail sales fell as sharply as they did, raising questions about the strength of the consumer. A decline that dramatic hasn’t been seen since the end of last year, and it adds more weight to the idea that the economy could be stalling. That’s the real message behind these numbers—not just a soft print, but a possible shift in behaviour, which currency pricing picks up fast.

From our point of view, the combination of softening consumer demand, more dovish language around pay, and technical rejection at previous resistance layers leaves room for downside continuation. This isn’t a call for panic, but rather a prompt to keep focus on short-term reaction zones. Should the price revisit 1.3480 or above, that would likely pull in renewed pressure from sellers using that level as a pivot. Meanwhile, if the 1.3455 floor is taken, the next pocket of interest lies around 1.3414, and momentum through that could allow acceleration toward 1.3386.

Each move lower opens a wider technical window, and the strength of those follow-throughs matters greatly. Weak rebounds after breakdowns usually validate the lower view, while sharp recoveries force a reassessment. So far, selling strength has been the correct approach. If we observe price once again testing, but failing to retake, that 1.3513 ceiling, that would underpin that theme further. Volumes and reaction time matter here—delayed responses to key levels can often confirm a shift in control.

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