If GBP/USD resistance near 1.2730 remains intact through Wednesday's Fed events then it could still give way if the BoE guides to a more hawkish rate path on Thursday, which would potentially put the 200-DMA at 1.2819 in focus.

With the Fed expected to cut by 25bp and the BoE to stand pat, the main driver will be post-decision guidance.

Chair Jerome Powell and other Fed officials have recently signaled a more gradual policy path ahead, with futures pricing a total of 72bp of cuts by the Dec. 2025 Fed meeting.

On the BoE side, rate futures are currently pricing a total of 50bp of cuts by year-end 2025. The respective rate strips for the UK and U.S. are pricing a terminal rate in Dec. 2025 of 4.25% for the BoE and 4.02% for the Fed.

This slight rate divergence may be enough to boost GBP/USD should it remain constant.

Sterling bulls will pay close attention to the Fed presser for clues at a more pronounced, hawkish, shift in U.S. policy.

Should STIR futures adjust to a higher Fed policy path, more in line with the BoE, GBP bears are likely to target recent trend lows at 1.2608 struck on Dec. 13 and the November low at 1.2475.

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(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

((paul.spirgel@thomsonreuters.com))