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British Pound (GBP) Forecasts: GBP/USD and EUR/GBP After BoE Hike

British Pound (GBP) Forecasts: GBP/USD and EUR/GBP After BoE Hike

Nick Cawley, Senior Strategist


What's on this page

GBP/USD and EUR/GBP Analysis and Charts

  • GBP/USD is down one cent over the week in thin trade.
  • EUR/GBP remains rangebound.
How to Trade GBP/USD
How to Trade GBP/USD
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How to Trade GBP/USD
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UK Breaking News: BoE Hikes by 25bps to 15-Year High

The Bank of England raised interest rates by 25 basis points on Thursday, in line with market forecasts, and left the door open for a further hike at September’s meeting. The UK central bank has now raised interest rates, by varying degrees, for 14 months in a row as it tries to control stubbornly high inflation. The latest market pricing shows a 67% probability of a 25bp hike on September 21 with a terminal rate of a fraction under 5.75% in March next year. The BoE, as always, says that future rate decisions will be data-dependent.

The BoE also said on Thursday that it would look at the future rate of UK bond sales, QT, at the September meeting. A faster pace of UK bond sales may help to tighten monetary conditions at the margin and give the Bank of England a small amount of wiggle room if needed.


For all market-moving events and data releases see the real-time DailyFX Calendar

Cable is picking up a small bid ahead of the weekend after the latest US Jobs Report showed a slight slowdown in job creation in July. The June headline figure was also revised lower to 185k from 207k.

July Jobs Report: Payrolls Rise by 187k, Driving Action in Gold and the US Dollar

The daily chart shows a mixed cable outlook with the pair sitting on the 50-day simple moving average and between the 20- and 200-day moving averages. Support at 1.2666 was briefly broken yesterday and may not hold a re-test. On the upside, if GBP/USD can close and open above 1.27546, then it may have the impetus to push back towards 1.2900 although this may need some fundamentals drivers.

GBP/USD Daily Price Chart – August 4, 2023


Retail trader data shows 57.33% of traders are net-long with the ratio of traders long to short at 1.34 to 1.

For a more in-depth look at GBP/USD sentiment, download the free guide below.

GBP/USD Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% 1% -5%
Weekly -2% 13% 2%
What does it mean for price action?
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EUR/GBP remains stuck in a 0.8504 to 0.8721 range and will likely stay there in the coming weeks. The pair are back above the 20- and 50-day simple moving averages but remain below the longer-dated indicator. Again a major fundamental shift will be needed to break this range.

EUR/GBP Daily Price Chart – August 4, 2023


You can learn about range trading from the guide below.

The Fundamentals of Range Trading
The Fundamentals of Range Trading
Recommended by Nick Cawley
The Fundamentals of Range Trading
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What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.