• The GBP/USD price analysis is bullish, but the pound has retreated slightly.

• The US and China are finally ready to meet and start trade negotiations.

• Market participants expect the Fed to keep interest rates unchanged.

The GBP/USD price analysis is bullish, but the pound has retreated slightly from its multi-day top due to dollar strength. The greenback got support from reports that China and the US will hold talks on Saturday to determine the fate of tariffs. Meanwhile, market participants are gearing up for the Federal Open Market Committee (FOMC) policy meeting.

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After weeks of waiting, the United States and China are finally set to meet and begin trade negotiations. The trade war between these two countries has had a significant impact on the global economy. A Reuters poll recently showed economists expect a global recession. At the same time, Trump’s tariffs have reduced demand for US assets in recent weeks.

Fortunately, trade tensions have been easing. Nevertheless, Trump announced new tariffs on the film industry, keeping the cloud of uncertainty over the economy.

Meanwhile, market participants expect the Fed to keep interest rates unchanged later in the day. Recent US economic data has shown a resilient economy. Therefore, there is no need for the Fed to rush rate cuts. Still, experts believe the economy will deteriorate in the coming months. As a result, market participants expect a rate cut in July.

On the other hand, the Bank of England will likely cut interest rates by 25-bps on Thursday. Moreover, policymakers might be more dovish due to the dimmer outlook for the global economy.

GBP/USD key events today

• Federal Funds Rate
• FOMC Statement
• FOMC Press Conference

GBP/USD technical price analysis: Bulls to challenge the range resistance

On the technical side, the GBP/USD price trades above the 30-SMA with the RSI over 50, supporting a bullish bias. However, on a larger scale, the price trades in a range between the 1.3225 support and the 1.3401 resistance level.

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The price initially traded in a bullish trend before it paused and started consolidating. Meanwhile, the RSI has made a series of lower highs, indicating a bearish divergence. However, bulls are in the lead within the range, meaning they might soon challenge the range resistance.

A break above would confirm a continuation of the previous trend. On the other hand, if bears return, they might break below the 1.3225 support, signaling a trend reversal.

https://www.forexcrunch.com/blog/2025/05/07/gbp-usd-price-analysis-dollar-strength-nudges-pound-lower/