GBP/USD Weakens Ahead of the Fed and BoEBritish Pound / US DollarCAPITALCOM:GBPUSDCapitalcomWith the Fed and BoE both announcing their latest policy decisions this week, GBP/USD could be heading into a more volatile period. The pair has already started to weaken ahead of the meetings, making the current technical picture worth paying close attention to. Let's take a look at some potentially key levels and scenarios… The Market Looks Beyond the Rate Decision Should the Fed and BoE hold rates steady as expected this week, market attention is likely to shift towards the accompanying statements and press conferences; a surprise move on either side, however, would put the decision itself back in focus For the Fed, resilient economic data continues to sit alongside moderating inflation, leaving policymakers in little rush to signal their next move. The BoE faces a different balancing act. Inflation has eased and UK growth remains subdued, but the recent rebound in oil prices has once again raised questions about how quickly inflationary pressures could return during the second half of the year. With expectations for both meetings already fairly settled, it may only take a subtle shift in language to change how markets view the path of interest rates over the coming months. That places added importance on how GBP/USD responds once the announcements are out of the way. Lower Highs Continue to Pressure Support The daily chart shows a market that has struggled to build any lasting upside momentum since February. Each recovery has stalled below the previous swing high, creating a sequence of lower highs that continues to define the broader structure. What makes the current setup interesting is the support zone beneath price. Buyers have repeatedly defended this area over recent months, preventing the broader decline from accelerating. At the same time, however, each rally has become progressively weaker, leaving sterling with less room to recover before fresh selling emerges. This creates an increasingly important technical backdrop for this week's meetings. A supportive outcome from the BoE, or a softer tone from the Fed, would first need to break that sequence of lower highs before suggesting a more meaningful improvement in sentiment. Until then, the broader structure continues to favour rallies being viewed with caution. GBP/USD Daily Candle Chart Past performance is not a reliable indicator of future results Short-Term Momentum Hinges on the Boundary Since the middle of July, GBP/USD has been trading within a well-defined descending channel, producing a consistent sequence of lower highs and lower lows. The move has been orderly rather than aggressive, potentially suggesting sellers remain in control without the type of panic often associated with major breakdowns. From a trading perspective, the channel offers a straightforward framework.The upper boundary remains the key level to watch; price continuing to hold below it keeps the current short-term structure in place, while a break above would mark a shift in that structure. A break beneath the recent lows could suggest sellers are attempting to extend the existing move and bring the longer-term support zone back into focus. Equally, this week's central bank meetings have the potential to change that picture. A decisive break above the channel would represent a change of character. Until that happens, the lower timeframe continues to reinforce the cautious message already being shown by the daily chart. GBP/USD Four-Hour Candle Chart Past performance is not a reliable indicator of future results Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.