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The GBP/USD pair is trading near the 1.3350 price region on Tuesday, striking a bullish tone as investors continue to move away from the US Dollar (USD) ahead of the Federal Reserve (Fed) monetary policy decision on Wednesday.
The Fed’s policy dilemma is being tested by rising energy prices tied to the Middle East war. Higher Oil prices are potentially delaying rate cuts, as officials balance persistent inflation risks against slowing growth. The core Personal Consumption Expenditures (PCE) Price Index accelerated to 3.1% YoY in January from 3% in December, signalling stalled progress toward the 2% goal, putting interest-rate cuts in jeopardy.
The Middle East war keeps markets under tension as the Strait of Hormuz is still partially seized by Iran. The United States (US) President Donald Trump is trying to gather allies to rally against the blockade, but has not yet been successful.
In the United Kingdom (UK), the Bank of England (BoE) will also reveal its interest rate decision on Thursday, with market players expecting a hawkish hold. Earlier in the day, UK Employment data is set to be released hours before the BoE interest rate decision. The data, however, isn't likely to significantly impact the pair, as the interest rate decision will already be set.
In the 4-hour chart, GBP/USD trades at 1.3340. The near-term bias is mildly bullish as the pair stabilizes above a cluster of supports. Price holds above the 20-period Simple Moving Average (SMA) near 1.3300 but remains below the 100-period SMA around 1.3400, framing a corrective rebound within a broader softening backdrop. The Relative Strength Index (RSI) indicator has rebounded toward 54 after dipping below 50 in the European session, signaling improving upside pressure after a prior downside stretch.
Immediate support is seen at 1.3299, with a break lower exposing the next floor at 1.3273. Holding above these levels would keep buyers positioned to challenge initial resistance at 1.3360, which guards the descending 100-period SMA near 1.3400. A clear move above 1.3360 would open the way toward the 1.3400 region, while failure to defend 1.3299 would weaken the current recovery bias and refocus attention on 1.3273.
(The technical analysis of this story was written with the help of an AI tool.)
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The GBP/USD pair is trading near the 1.3350 price region on Tuesday, striking a bullish tone as investors continue to move away from the US Dollar (USD) ahead of the Federal Reserve (Fed) monetary policy decision on Wednesday.
TD Securities strategists Prashant Newnaha and Alex Loo maintain a constructive stance on the Australian Dollar (AUD) despite the Reserve Bank of Australia's (RBA) close 5-4 vote. A positive terms of trade shock and increased hedging by Australian pension funds underpin AUD outperformance in G10.
ING’s Commodities Strategist Ewa Manthey highlights that recent output cuts at Alba and Qatalum tighten the Aluminium supply outlook, with Gulf disruptions now affecting a notable share of regional production.
Commerzbank’s Commodity Analyst Carsten Fritsch compares current Oil disruptions from the Strait of Hormuz blockade with the 1970s oil crises, highlighting record supply shortfalls and potential demand and supply adjustments over time.
The British Pound (GBP) trades broadly flat against the Japanese Yen (JPY) on Tuesday as a thin economic calendar keeps price action subdued, with attention firmly shifting to the Bank of England (BoE) and Bank of Japan (BoJ) interest rate decisions due on Thursday.
Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is flat against the Dollar (USD) but supported by elevated Oil prices and narrow yield spreads.
The NZD/USD pair is trading near the 0.5860 price region on Tuesday, erasing almost all its intraday losses as the Middle East war escalates, pressuring the US Dollar (USD).
OCBC strategists Sim Moh Siong and Christopher Wong note USD/THB has risen over 4% month‑to‑date as markets scaled back expectations for near‑term Fed easing and Oil prices surged, hurting Thailand’s terms of trade.
Gold price consolidates on Tuesday during the North American session around the $5,000 level, down 0.11% amid broad US Dollar weakness and falling US Treasury yields.