GBP/USD Stabilizes at 1.3200 Support Following Fed-Driven Decline

GBP/USD has found support at the 1.3200 psychological level after declining 1.2% from Tuesday's highs, driven by hawkish Federal Reserve commentary. The pair dropped from 1.3350 as Fed officials pushed back against aggressive rate cut expectations for 2025. Sterling's losses were limited by positive UK economic data, with Services PMI rising to 54.3 from 53.8, indicating expansion in the dominant sector. Technical analysis shows the pair holding above the 50-day moving average at 1.3180, providing immediate support. The RSI has retreated from overbought territory to 52, suggesting room for recovery. Resistance levels stand at 1.3250 and 1.3300. Traders await Thursday's Bank of England policy decision, where officials are expected to maintain rates at 5.00% while potentially signaling a gradual easing path, which could provide sterling with renewed upward momentum.