GBP/USD at crucial support as markets ditch rate cut bets and price in hikes instead. These are the key levels to watch

GBP/USD is trading at a pivotal level. The pair has dropped to its lowest since December 2025, hitting the bottom of a range that has contained price action for almost exactly one year. The decline has been driven by a dramatic shift in Bank of England (BoE) policy expectations, as oil-driven inflation from the Iran crisis has forced markets to abandon rate cut bets entirely.

Here’s what you need to know:

• GBP/USD has dropped to the lows of a year-long range around 1.32, testing this level for the first time since reclaiming it in November 2025
• BoE rate expectations have flipped entirely. Before the Iran war, markets priced an 86% chance of a March cut. Now, markets price two to four hikes in 2026
• The BoE held unanimously at 3.75% in March, with MPC members stating the balance has shifted “away from considering a cut towards considering a hike”
• RSI is showing bullish divergence on the daily chart, suggesting downside momentum may be fading

GBP/USD: the daily chart

GBP/USD is testing the lows of a year-long range at 1.32, with the 200-day SMA sitting at the range equilibrium around 1.345 and RSI showing bullish divergence as downside momentum fades.

The daily chart shows GBP/USD trading within a broad range that has been in place since April 2025. Price has spent almost exactly one year between range highs near 1.3750 and range lows around 1.32, and it is now testing the bottom of that range for the first time since last November.

A bearish channel that began at the rejection of range highs in late January has driven price straight down to the range lows. The 200-day SMA sits right at the range equilibrium around 1.345, making it the dividing line between the bullish and bearish halves of the range.

The RSI is showing bullish divergence, with price printing lower lows while the RSI prints higher lows. This does not guarantee a reversal, but it suggests that the selloff could be losing steam.

Key levels on the daily:

• 1.345 (200 SMA / range equilibrium): A reclaim could put GBP/USD back in the bullish half of the range
• 1.3750 (range highs): Potential upside target if the 200 SMA is reclaimed
• 1.32 (range lows): Current support. Holding here keeps the ranging regime intact
• Below 1.32: A breakdown could shift the structure from ranging to declining

GBP/USD: the 4-hour chart

The 4-hour chart shows the bearish trend in detail, with RSI hitting its most oversold reading of the move at the range lows and resistance sitting at the 0.618 Fibonacci retracement near 1.3350.

The 4-hour chart shows the bearish trend in more detail. Price has been printing lower highs and lower lows since late January, and that structure remains intact.

When price hit the 1.32 support area, the RSI reached its most oversold reading of the entire downtrend, potentially suggesting selling pressure may have reached an extreme at this key level.

Two resistance levels to watch above:

• 1.3350 (0.618 Fibonacci retracement): The first meaningful resistance. A break above here could be the first sign that the local bearish structure is weakening
• 1.3450: The level that matters for the bigger picture. A reclaim here aligns with the daily 200 SMA and could put price back in the upper half of the high timeframe range

The trend remains bearish until these levels are reclaimed. Until then, 1.32 is the line that needs to hold.

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