Key Moments
- GBP/USD trades around 1.3385 after attracting dip-buying interest and halting its pullback from 1.3425.
- Softer US Core CPI weighs on the USD, but Fed rate hike expectations and US-Iran tensions limit Dollar losses.
- Technical signals remain mixed, with GBP/USD capped below key 4-hour moving averages and Fibonacci resistance levels.
Fundamental Drivers: Softer CPI vs. Fed Expectations
The GBP/USD pair is seeing renewed demand during the Asian session on Tuesday, as buyers step in following the prior day’s retreat from the 1.3425 area, which marked the weekly high. The pair is trading near 1.3385, registering a gain of just over 0.10% on the day, though the immediate upside appears constrained.
The US Dollar edges lower after softer US Core Consumer Price Index (CPI) data eased fears of an unchecked inflation surge. This shift in inflation sentiment is providing a tailwind for GBP/USD. However, market participants continue to assign around a 70% probability that the US Federal Reserve will raise interest rates by the end of this year. In addition, renewed tensions between the US and Iran are helping to curb deeper USD declines, thereby restricting the topside move in the currency pair.
Technical Picture: Consolidation Below Key Resistance
From a technical standpoint, GBP/USD maintains a bearish short-term tone while it remains below the 200-period Simple Moving Average (SMA) on the 4-hour chart. This level aligns with the 50% Fibonacci retracement of the recent fall from the 1.3655 region. The pair has also repeatedly failed to sustain advances above the 23.6% Fibonacci retracement level, signaling that traders should be cautious about positioning for a sustained rally despite some improvement in momentum indicators.
The Moving Average Convergence Divergence (MACD) histogram is marginally positive, and the Relative Strength Index (RSI) is fluctuating near the neutral 50 mark. This combination suggests modest underlying demand but not enough, at this stage, to decisively overcome key resistance zones at 1.3438 – the 38.2% Fibonacci level – and the 1.3475-1.3480 confluence, which comprises the 200-period SMA on the 4-hour chart and the 50% retracement. Clearing these barriers could open the door to additional Fibonacci resistance levels at 1.3520 and 1.3579.
Support Levels and Market Structure
On the downside, clear structural support is identified near the recent swing low at 1.3305. A firm break below this level would likely reinforce bearish momentum and expose GBP/USD to further weakness. Overall, the broader configuration points to a market that is consolidating below medium-term resistance, with neither bulls nor bears in full control.
(The technical analysis of this story was written with the help of an AI tool.)
Intraday USD Performance Against Majors
The following table shows the percentage change of the US Dollar (USD) against major currencies today. According to the data, the US Dollar was the strongest versus the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.13% | -0.03% | -0.05% | -0.08% | -0.06% | -0.21% | |
| EUR | 0.13% | -0.00% | 0.09% | 0.07% | -0.06% | 0.09% | -0.08% | |
| GBP | 0.13% | 0.00% | 0.11% | 0.08% | -0.04% | 0.10% | -0.08% | |
| JPY | 0.03% | -0.09% | -0.11% | -0.02% | -0.16% | -0.02% | -0.17% | |
| CAD | 0.05% | -0.07% | -0.08% | 0.02% | -0.13% | 0.02% | -0.16% | |
| AUD | 0.08% | 0.06% | 0.04% | 0.16% | 0.13% | 0.15% | -0.05% | |
| NZD | 0.06% | -0.09% | -0.10% | 0.02% | -0.02% | -0.15% | -0.17% | |
| CHF | 0.21% | 0.08% | 0.08% | 0.17% | 0.16% | 0.05% | 0.17% |
The heat map represents percentage changes of major currencies relative to each other. The base currency is taken from the left-hand column, and the quote currency is taken from the top row. For instance, selecting the US Dollar from the left column and moving across to the Japanese Yen cell will show the percentage change for USD (base)/JPY (quote).
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