The GBP/USD currency pair found support near the 1.3200 level during the Asian session on Tuesday, following a dip-buying interest that stalled the previous day's decline from the 100-period Simple Moving Average (SMA) on the 4-hour chart [1]. Despite this, the pair remains confined within a range that has persisted for approximately three weeks, indicating caution among traders before committing to any significant upward movement [1].
The British Pound received a boost from better-than-expected British Retail Consortium (BRC) Like-For-Like Retail Sales data, as well as comments from Bank of England (BoE) member Megan Greene, who expressed concerns about second-round inflation effects if the central bank does not act soon [1]. Additionally, a modest profit-taking slide in the US Dollar from its 18-month peak, reached on Monday, provided further support to GBP/USD [1].
However, the downside for the US Dollar appears limited due to expectations that the Federal Reserve will raise borrowing costs again by the end of the year, ongoing inflation risks from volatile energy prices, and elevated US bond yields [1]. Geopolitical tensions, including the US-Iran standoff and intensified fighting between the Iran-backed Houthi group and the Saudi-led coalition in Yemen, continue to support the safe-haven appeal of the USD, potentially capping gains in GBP/USD [1].
Technically, the pair's range-bound action is seen as a bearish consolidation phase following a decline from the August swing high. Spot prices remain below the 100-period SMA at 1.3255, with subdued momentum indicators such as the Relative Strength Index (RSI) just below 50 and marginally negative Moving Average Convergence Divergence (MACD) readings [1]. A breakdown below the 1.3180 support could trigger further declines, while any recovery attempts are likely to face resistance near the 100-SMA and below the 1.3300 mark. A sustained move above this level would be required to shift the current bearish outlook [1].
CONCLUSION
GBP/USD is currently supported above 1.3200, aided by positive UK retail sales data and BoE inflation concerns, but remains in a bearish consolidation phase below key technical resistance. Market sentiment is cautious, with downside risks prevailing unless a sustained break above 1.3300 occurs.