The GBP/USD pair gained modest buying support during Tuesday's early Asian session, holding above the key 1.3300 level. Despite two-way price fluctuations in the previous session, the overall trend remains slightly bullish for the pound, as the Federal Reserve's upcoming policy decision is widely perceived as dovish, dampening the recent rebound momentum of the US dollar.
Markets broadly expect the Fed to cut policy rates again at Wednesday's meeting, while the dollar's recent rebound from late-October lows has been restrained by easing expectations. Against this backdrop, GBP/USD has received passive support, showing a stable-to-strong short-term pattern. Meanwhile, the OECD last week upgraded its UK growth forecast and projected the Bank of England (BoE) would conclude its easing cycle by Q2 2026.
This assessment has bolstered confidence in the UK economy's medium-term resilience, providing additional support for the pound. "The upward revision to UK growth expectations keeps the pound relatively stronger among major currencies," noted a senior analyst at a European macro research firm.
However, GBP bulls remain hesitant to aggressively increase positions. The latest UK CPI data showed October inflation eased to 3.6% from 3.8% over the prior three months, reinforcing market bets that the BoE may initiate a rate-cutting cycle at next week's meeting.
Uncertainty over future policy paths has capped the pound's upside potential. Traders are more inclined to await US employment-related data—including ADP payrolls and JOLTS job openings—for fresh trading catalysts.
"The Fed's policy tone remains the core driver for the dollar's near-term direction, while cooling UK inflation has prompted markets to reassess the BoE's rate-cut timeline," commented a forex strategist.
"GBP/USD needs stronger fundamental support to sustain upward momentum; otherwise, range-bound trading may persist," added a UK financial markets analyst.
From a technical perspective, GBP/USD has gradually climbed after rebounding from the psychological 1.3000 level, now trading steadily above short-term moving averages, indicating resilient medium-term upside momentum. However, strong resistance persists at the 1.3360–1.3400 zone, overlapping with previous congestion areas, creating notable pressure for bulls.
Failure to break above this range could keep prices consolidating in the near term. Technical indicators show MACD momentum slowing and RSI hovering in neutral-to-strong territory, suggesting upward potential remains but requires stronger fundamentals for a breakout.
A drop below 1.3260 could trigger a pullback toward 1.3180, while a sustained move above 1.3400 would open room for further gains.
The current stability above 1.3300 appears more driven by dollar weakness than sterling strength. Short-term price action will likely hinge on policy divergence between the two central banks. If the Fed signals greater dovishness while BoE rate-cut expectations stay moderate, GBP/USD may sustain range-bound highs or extend gains. Conversely, clearer easing signals from the BoE would significantly limit the pound's upside momentum.
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