Cable Holds Above 1.30 Ahead of BOE Decision

Key Events

• The DXY has surged back toward the 100-mark, threatening additional downside in the currency market if another bullish close is recorded.
• GBPUSD remains supported above 1.30, facing potential volatility between the outcomes of the DXY movement and BOE decision.
• As the U.S. government shutdown continues—supporting the DXY’s safe-haven appeal—the BOE is expected to hold rates at 4%, with inflation still proving sticky.
• The BOE meeting and vote distribution will be key volatility triggers for pound pairs.

DXY Outlook: Monthly Time Frame – Log Scale

From a monthly perspective, the DXY’s recent strength dates back to a notable rebound from a 17-year trendline and 96-support, recorded in September. This structure highlights long-term upside risks for the U.S. dollar, unless a decisive break below 96 occurs again, which would redefine the broader technical framework.

DXY Outlook: Daily Time Frame – Log Scale

Source: Tradingview

On the daily chart, the DXY’s rebound from its 17-year support near 96 resembles an inverted head-and-shoulders breakout, currently testing the 100.20 resistance.
A confirmed close above this level would complete the pattern, targeting the 100.80 and 103.40 levels — moves that could potentially pressure GBPUSD toward 1.2940 and 1.2740, as detailed in the following charts.

From the downside, if the DXY retreats below 99.40, the selling pressure on major currencies may ease.
In that scenario, the DXY is expected to retest the neckline and validate the inverted head-and-shoulders formation, with the trendline connecting consecutive lower highs from May to August, between 98.50 and 98.00.

GBPUSD Outlook: Weekly Time Frame – Log Scale

Source: Tradingview

From a weekly perspective, GBPUSD remains above the 1.30 psychological barrier and support.
Taking the Fibonacci retracement of the yearly rally between January and June 2025, the next key supports below 1.30 correspond to the 0.5 and 0.618 retracement ratios, aligning with 1.2940 and 1.2740, respectively.

From the upside, a close back above 1.3140 would open the way for an advance toward yearly highs, with resistance levels at 1.3400, 1.3640, and 1.3740, before confirming a continuation toward the 2021 peaks, as shown in the monthly chart below.

GBPUSD Outlook: Monthly Time Frame – Log Scale

Source: Tradingview

From a monthly angle, the 1.2940 and 1.2740 levels align with the upper boundary of the consolidation zone extending from the 2008 highs, which Cable successfully broke above earlier this year.

From the upside, a sustained hold above the yearly highs at 1.38 — coinciding with the 2009 troughs — could strengthen bullish forecasts toward 2021 and 2018 peaks at 1.42 and 1.44, respectively.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves