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Yesterday's rate cut by the Bank of England did not push the pound out of the 1.2367–1.2500 range. From a technical standpoint, the 70-pip price drop does not signify bearish strength; instead, it indicates temporary weakness among bulls, who were unable to consolidate above 1.2500 due to the rate cut. This gives bullish traders another opportunity to attempt a breakout, particularly with the expectation of weaker U.S. employment data. The forecast for Nonfarm Payrolls stands at 169K, compared to 256K in December.
There remains a weak divergence between the price and the oscillator, but this may have already been exhausted by yesterday's price decline. The divergence is evolving into a consolidation range (represented by a gray rectangle). From this perspective, a breakout above the 1.2500 resistance level seems likely, with a target of 1.2616.
However, if the U.S. labor market data unexpectedly comes in strong and the price falls below the 1.2367 support level, the dollar will continue to strengthen overall, pushing the pound down to 1.2186.
On the four-hour timeframe, the price is below the MACD line but above the balance line. The Marlin oscillator is at the neutral zero level, indicating that the price is in a waiting phase ahead of today's key news.
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