GBP/USD Faces Pressure as Fed-BoE Policy Divergence Widens

GBP/USD is under moderate selling pressure as diverging monetary policy expectations between the Federal Reserve and Bank of England weigh on sterling sentiment. The pair has declined approximately 0.5% this week, trading near 1.2650 as traders price in a more hawkish Fed stance compared to the BoE's cautious approach amid UK economic uncertainties. Adding to pound weakness, escalating Middle East tensions are boosting safe-haven dollar demand, creating additional headwinds for the cable. The BoE's recent communications suggest a data-dependent approach to future rate decisions, while Fed officials maintain their higher-for-longer narrative. Technical analysis shows immediate support at 1.2620, with resistance capped at 1.2700. The weekly close below the 50-day moving average at 1.2680 reinforces the bearish bias, with potential for further downside toward 1.2580 if geopolitical risks intensify.