GBP/USD Price Forecast: Sees more downside below 1.3430 amid dovish BoE bets

GBP/USD ticks lower to near 1.3480 amid weakness in the Pound Sterling.
The British currency has been battered by strengthening dovish BoE prospects.
BoE’s Taylor sees two or three interest rate cuts before returning to the neutral level

The GBP/USD pair edges lower to near 1.3480 during the European trading session. The pair is under pressure as the Pound Sterling (GBP) trades broadly uncertain amid firming speculation that the Bank of England (BoE) could deliver a number of interest rate cuts in the near term.

BoE dovish expectations have been prompted after comments from Monetary Policy Committee (MPC) member Alan Taylor in a fireside chat on Monday in which he warned of downside labor market risks, expressed confidence in inflation normalization, and anticipated two or three interest rate cuts before reaching neutrality, a level where interest rates neither support nor restrict economic growth.

“Risks are shifting to lower inflation and higher unemployment, Taylor said, and added, “We [the BoE] might have two to three rate cuts to go before theoretical neutral level.”

Latest United Kingdom (UK) employment and Consumer Price Index (CPI) data also showed a higher jobless rate and moderate inflation growth.

Meanwhile, the US Dollar (USD) trades broadly firm despite United States (US) President Donald Trump delivering fresh tariff threats.

On Monday, Trump threatened steeper levies on countries that intend to dishonour trade deals while exploring benefits from the Supreme Court’s (SC) blocked tariff policy.

GBP/USD technical analysis

GBP/USD trades marginally lower at around 1.3470. The 14-day Relative Strength Index (RSI) hovers near 40.00. A close below the same could trigger a fresh downside momentum.

The 20-day Exponential Moving Average (EMA) slopes lower and sits overhead at 1.3561, capping rebounds and preserving a soft short-term tone. The scenario in which the price closes below the February 19 low of 1.3434 would make it vulnerable to the January 19 low of 1.3344.

A recovery only gains traction on a sustained break back above the 20-day EMA; absent that, rallies risk fading, and the downswing could extend.