• For the third day in a row, the price of the pound sterling against the US dollar GBP/USD is trying to rebound higher with gains at the level of 1.2732.
• It is recovering from strong recent selling operations, which led to it moving towards the support level of 1.2656, its lowest in a month.
• During today’s session, Wednesday, the price of the pound sterling rose slightly after inflation in Britain fell to the Central Bank’s target of 2% in May, as expected.

According to the results of the economic calendar, British core inflation also fell to 3.5% from 3.9%, in line with expectations, and service inflation fell to 5.7% from 5.9%. Despite this, the Bank of England recently said that reaching the target inflation alone will not lead to a cut in interest rates. Moreover, the Bank of England is expected to keep its key interest rate at a 16-year high of 5.25% when it decides on monetary policy tomorrow, but most economists expect two rate cuts this year, with the first likely in August.

On the political front, recent polls show the Labor Party leading the upcoming July 4 election, while the Conservatives led by British Prime Minister Rishi Sunak are in second place.

According to reliable forex trading platforms, GBP/USD will rise if Dave Ramsden votes against a rate cut on Thursday, as this would significantly reduce the chances of a rate cut in August. The Bank of England is expected to keep interest rates at current levels on Thursday and indicate that any decision to cut rates will depend on upcoming data. Meanwhile, the consensus expects a 7-2 vote to keep rates unchanged. Overall, this would be a neutral outcome for the pound.

However, any shift in the voting structure could strongly suggest a shift in the MPC. The market is currently pricing in a 50-50 chance of a rate cut in August, and if those odds fall, sterling will rally.

With that in mind, any changes in the voting structure would provide a strong early signal that would affect the outlook for August.

Ultimately, the chance of a 6-3 vote for a rate cut is low, as this would suggest that another MPC member has looked at the strong inflation and survey data and believes it indicates a need for rate cuts. This would be very unusual. However, there is a higher chance that the MPC will revert to an 8-1 vote to keep rates on hold, with Dave Ramsden changing his vote in light of the stronger-than-expected inflation reading in April.

Technical forecasts for the GBP/USD pair today:

According to the performance on the daily chart the bulls’ confidence in controlling the trend is back. Technically, the GBP/USD price is moving above the resistance of 1.2775, which supports the bullish outlook again. Furthermore, the stronger and more continuous control of the trend will be by moving towards the psychological resistance level of 1.3000. In contrast, and over the same period of time, the support of 1.2600 will be important for the strength of the downward shift. clearly, this will depend on the Bank of England’s decisions tomorrow and the future of British policy, in addition to the policy of global central banks.

Today, we expect the GBP/USD price to remain in narrow ranges in light of the American holiday.

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