Sterling Slips Below 1.3500 as USD Strength Weighs

Key Moments

GBP/USD trades near 1.3485, easing a little over 0.10% after failing to extend Monday’s advance above 1.3500.
Renewed geopolitical tensions and reinforced expectations for further Fed tightening support a stronger USD and cap sterling gains.
Technical structure remains constructive, with GBP/USD holding above key moving averages and Fibonacci levels that may attract dip buyers.

GBP/USD Pulls Back After Testing Multi-Day Highs

The GBP/USD pair is unable to build on its prior session rally that carried it beyond the 1.3500 psychological threshold to a more than one-and-a-half-week high. During the Asian session on Tuesday, the pair comes under selling pressure and gives back part of those gains. Spot is last seen around the 1.3485 area, down just over 0.10% on the day, as a firmer US Dollar (USD) limits sterling’s upside.

Geopolitical Tensions and Fed Outlook Lift the Dollar

Demand for the USD improves as investors respond to reports that US forces carried out self-defense strikes in southern Iran on Monday, cooling expectations for a deal to end a three-month-old conflict in the Middle East. At the same time, a resurgence of inflation concerns underpins more hawkish expectations for the US Federal Reserve (Fed). These factors help the safe-haven USD recover from its previous slide to more than a one-week low, putting pressure on the GBP/USD pair.

Technical Picture Still Favors Sterling Buyers

From a technical standpoint, GBP/USD retains a mildly bullish bias. Spot prices continue to trade above the 200-period Exponential Moving Average (EMA) on the 4-hour chart and the 50.0% Fibonacci retracement of the decline from the monthly peak. This configuration supports a constructive outlook for the pair.

Momentum gauges reinforce that view. The Relative Strength Index is moderately positive near 61, while the Moving Average Convergence Divergence (MACD) indicator remains in positive territory. These signals suggest that upward momentum is still present, though without pointing to an extreme overbought condition.

Key Resistance and Support Levels

On the upside, initial resistance is aligned with the 61.8% Fibonacci retracement at 1.3517. Above this, the 78.6% retracement at 1.3575 comes into view, with the recent swing high at 1.3649 marking a more distant hurdle.

On the downside, first support is located at the 50.0% retracement at 1.3476. The 200-period EMA at 1.3460 provides an additional layer of support below that zone. Further downside protection emerges at the 38.2% Fibonacci level at 1.3435, followed by deeper retracement supports at 1.3384 and 1.3303 if a more extended corrective pullback develops.

(The technical analysis of this story was written with the help of an AI tool.)

Intraday USD Performance Against Major Currencies

The table below summarizes the percentage change of the US Dollar (USD) versus major currencies today. The USD shows the largest gain versus the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD	—	0.09%	0.13%	0.02%	0.04%	0.08%	0.32%	0.05%
EUR	-0.09%	—	0.07%	-0.06%	-0.03%	0.03%	0.25%	-0.04%
GBP	-0.13%	-0.07%	—	-0.13%	-0.10%	-0.04%	0.19%	-0.09%
JPY	-0.02%	0.06%	0.13%	—	0.02%	0.09%	0.29%	0.04%
CAD	-0.04%	0.03%	0.10%	-0.02%	—	0.08%	0.30%	0.02%
AUD	-0.08%	-0.03%	0.04%	-0.09%	-0.08%	—	0.22%	-0.06%
NZD	-0.32%	-0.25%	-0.19%	-0.29%	-0.30%	-0.22%	—	-0.28%
CHF	-0.05%	0.04%	0.09%	-0.04%	-0.02%	0.06%	0.28%	—

The heat map shows percentage moves of major currencies relative to one another. The base currency is taken from the left column, and the quote currency from the top row. For instance, selecting the US Dollar on the left and moving across to the Japanese Yen cell gives the percentage change for USD (base)/JPY (quote).