GBP/USD Forecast: Pound Sterling looks fragile ahead of Fed and BoE meetings

GBP/USD edged lower toward 1.2100 following a quiet Asian session.
Pound Sterling struggles to benefit from the improving risk mood.
The Fed and the BoE will announce monetary policy decisions later in the week.

GBP/USD fluctuated in a narrow channel in the Asian session before retreating to the 1.2100 area in the European morning. The near-term technical outlook suggests that the bearish bias stays intact.

Over the weekend, the United Arab Emirates (UAE) requested a UN Security Council emergency meeting to discuss the situation in the Gaza Strip, asking "for an immediate ceasefire to ensure that civilians and civilian institutions are not targeted."

There seems to be an improvement in risk mood following this development on Monday, with the UK's FTSE 100 Index gaining more than 0.5% in the European session. Additionally, US stock index futures trade in positive territory, pointing to a bullish opening in Wall Street.

Pound Sterling price today

The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies today. Pound Sterling was the strongest against the Swiss Franc.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		0.04%	0.09%	-0.02%	-0.29%	-0.08%	-0.23%	0.05%
EUR	-0.03%		0.06%	-0.04%	-0.32%	-0.11%	-0.26%	0.01%
GBP	-0.13%	-0.05%		-0.17%	-0.40%	-0.21%	-0.35%	-0.04%
CAD	0.05%	0.06%	0.11%		-0.27%	-0.05%	-0.21%	0.07%
AUD	0.27%	0.33%	0.40%	0.24%		0.20%	0.04%	0.33%
JPY	0.07%	0.11%	0.24%	0.02%	-0.23%		-0.18%	0.12%
NZD	0.25%	0.28%	0.34%	0.22%	-0.04%	0.15%		0.29%
CHF	-0.06%	-0.02%	0.04%	-0.08%	-0.33%	-0.15%	-0.29%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Nevertheless, the US Dollar (USD) stays resilient against its rivals, making it difficult for GBP/USD to gain traction. In case the risk rally picks up steam in the second half of the day, the USD could lose some interest. The US economic docket will not feature any high-impact data releases on Monday.

Later in the week, the Federal Reserve (Fed) and the Bank of England (BoE) will announce monetary policy decisions. Investors could opt to stay on the sidelines ahead of these events and limit GBP/USD's action.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50 and GBP/USD closed the last 4-hour candle below the 20-period Simple Moving Average (SMA), suggesting that the bearish bias stays intact.

On the downside, 1.2075 (static level) aligns as interim support before 1.2050 (end-point of the latest downtrend) and 1.2000 (psychological level).

The 50-period SMA forms dynamic resistance at 1.2140 ahead of 1.2180 (100-period SMA) and 1.2200 (Fibonacci 23.6% retracement, 200-period SMA).

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