On Wednesday, GBP/USD fell below the round 1.3400 level as the latest UK inflation report showed a notable decline, ahead of the Bank of England's upcoming monetary policy decision on Thursday.

The pound sterling weakened sharply as the CPI for November revealed an unexpected result: instead of the anticipated increase, it decreased.

The economic situation in the U.S. remains tense as Federal Reserve officials adjust their positions. Fed Chairman Christopher Waller, whom President Donald Trump planned to appoint as Fed Chair, noted that the rate cut had a positive effect on the labor market. He emphasized that inflation is unlikely to rise again, stating that current rates are 50-100 basis points above the neutral level, indicating that immediate rate cuts are unnecessary.

Meanwhile, the consumer price index (CPI) in the UK decreased month-on-month from 0.4% to -0.2%, falling below forecasts. Year-on-year, the CPI fell from 3.6% to 3.2%, missing expectations of a 3.5% decline.

The publication of this data fully accounted for the market's expectations regarding a rate cut by the BoE, resulting in the Bank's rate remaining at 3.75% by the end of the year. For 2026, investors have priced in a 65-basis-point reduction in interest rates.

On Thursday, the U.S. is expected to release CPI data and jobless claims for the week ending December 13. It is forecasted that around 225,000 people will file for unemployment benefits.

From a technical standpoint, the upward or neutral trend for the GBP/USD pair remains intact, but the inflation data have pushed investors down towards the round level of 1.3300 before partially compensating for losses. The RSI (Relative Strength Index) remains bullish, suggesting further growth.

If GBP/USD finishes the day above the round level of 1.3400, a sideways price movement can be expected before the BoE's decision. On the other hand, if the pair stays below the round level of 1.3400, it risks approaching the 200-day moving average, followed by the round level of 1.3300.