The GBP/USD pair begins the new trading week with moderate moves, consolidating its recent solid gains. Last week, as expected, the Bank of England cut its interest rate by 25 basis points to 4%, marking the lowest level since early 2023. However, the split vote within the regulator — 5 to 4 — indicated stronger resistance to further rate cuts than markets had anticipated. This led traders to reassess expectations for aggressive monetary policy easing, thereby supporting the British pound. Combined with the U.S. dollar's moderate performance, this creates a favorable environment for GBP/USD.

The U.S. dollar index, which tracks the greenback against a basket of currencies, is struggling to build on Friday's modest rebound from a two-week low. Traders are factoring in the likelihood that the U.S. central bank will cut interest rates at least twice before the end of the year. These expectations help maintain short-term positive sentiment for GBP/USD.

On Saturday, dovish sentiment from the Fed was reinforced by comments from Fed Governor Michelle Bowman. She noted that three rate cuts this year would be appropriate, adding that labor market weakness outweighs inflation risks. This outlook encourages buying on any pullback, limiting GBP/USD downside ahead of key macroeconomic releases this week.

On Tuesday, U.S. consumer inflation data will be published, followed on Thursday by the UK's preliminary Q2 GDP figures and the U.S. Producer Price Index. These reports could act as drivers for further price action and help determine market direction. Meanwhile, speeches from key FOMC members could increase demand for both the dollar and GBP/USD, in the absence today of any significant UK or U.S. economic releases likely to move the market.

From a technical standpoint, oscillators on the daily chart are mixed. The Relative Strength Index has broken above the 50 level, indicating emerging buying strength. A break above resistance at 1.3475 and then the 50-day SMA near the 1.3500 round level would clear the way for GBP/USD to reach the 1.3600 round level. On the other hand, support lies at the 1.3400 round level, below which the 100-day SMA is located near 1.3362. A move below this level would weaken buyers' momentum and leave prices vulnerable to further declines toward the 1.3300 round level and lower.