According to Forex trading, the pound received a boost against the US dollar GBP/USD last week on the back of clear leaks from the Federal Reserve that gave a strong hint that it would start with a decisive 50 basis point rate cut instead of the usual 25 basis point move. The leaks came via a number of financial news outlets, most notably from a Wall Street Journal journalist known for his close connections to policymakers. Analysts suggest that the US Federal Reserve may have preferred a little bit of room in pricing to reflect the differences in the discussion. “But actively encouraging the market to add more bets (via comments from former staffers and Nick Timiraos of the Wall Street Journal), and then offer less, could raise questions about the credibility of the ‘quiet period’ communications process.Overall, the improved odds of a 50bp cut have weakened the US dollar, breaking the September low in GBP/USD. From a technical perspective, the pullback was necessary as the exchange rate rallied very rapidly in August, making it technically overbought. Technical forecasts for the GBP/USD pair today:It’s interesting to note that the decline has touched the 23.6% Fibonacci retracement level of the current medium-term uptrend, which gives us a strong technical support level to consider in the coming days if the Fed rumours prove unfounded and they opt for a smaller 25 basis point rate cut. Therefore, the decline in GBP/USD from 1.3250 to 1.30 (the lowest level last week) alleviates the previous overbought conditions, removes some “long” Pound positions from the setup, and prepares the exchange rate for new gains in the coming days.As always, this week’s forecast model is conservative, but we believe a rally towards 1.3250 resistance could re-emerge in the next 1-2 weeks, based on the assumption that the US Federal Reserve cuts interest rates by 50bp. However, fresh multi-year highs are now a distinct possibility as the broader US dollar decline develops in sympathy with the start of the Fed’s rate-cutting cycle.Overall, it’s a busy week in the UK too, with the UK inflation report on Wednesday and the Bank of England decision on Thursday providing some local flavour. According to the economic calendar, core CPI inflation is expected to rise by consensus from 0.0% to 0.4% on a monthly basis, taking the annual rate from 3.3% to 3.5%. The headline CPI is forecast to jump from -0.4% on a monthly basis to 0.3%, while the annual rate is expected to remain at 2.2%.Any downside in the data could weigh on the pound. However, the survey data continues to show a resilient economy and there are no signs of a major inflationary downturn. The Bank of England and institutional economists believe that UK inflation will rise slightly over the rest of 2024, and this week’s data should confirm that. Furthermore, the BoE will acknowledge these inflation dynamics on Thursday by leaving interest rates unchanged at 5.0% and announcing that it will continue to monitor the data when deciding on future rate cuts.Given that there is no monetary policy report or press conference this week, financial markets will closely monitor the minutes of the meeting and the voting pattern on the Monetary Policy Committee. In this regard, analysts say, “The focus may be on the voting pattern among committee members. We are preparing for an 8-1 or 7-2 vote, with Dave Ramsden possibly joining Swati Dhingra in opting for an immediate rate cut.” “A closer vote, where we see more balance between hawks and doves, could lead to Pound sales as markets increase bets on more frequent cuts than once per quarter.” The base case among economists is that the vote will end in either an 8-1 or 7-2 vote, which, if true, would support our bullish stance on GBP/USD.More By This Author:USD/JPY Analysis: Ready To Break Psychological LevelUSD/JPY Analysis: Losses Form Major SupportGold Analysis: Stable Ahead Of US Inflation Report