The British Pound (GBP) appreciated against the US Dollar (USD) on Tuesday, recovering to the 1.3375 area and trimming previous losses. The pair is aiming to retest resistance at the key 200-day Simple Moving Average (SMA), which is positioned just below 1.3400 and has capped the Pound's recovery over the past two weeks [1]. Technical analysis indicates that GBP/USD trades at 1.3378, having broken the downtrend resistance line from May highs but remaining capped below the 200-day SMA at 1.3397. Momentum indicators are neutral-to-bullish, with the Relative Strength Index (RSI) just above 50 and the MACD in positive territory [1].
Market sentiment is cautious as investors await the release of US Consumer Price Index (CPI) figures, which are expected to show a slight moderation in prices but remain well above the Federal Reserve's 2% target. Additionally, Fed Chairman Kevin Warsh is scheduled for two Congressional hearings this week, which could further influence market direction [1].
The Pound has maintained a positive trend since Prime Minister Keir Starmer resigned in late June. Investors are reportedly confident that Andrew Burnham, the leading candidate to succeed Starmer, will adhere to Chancellor Reeves' fiscal rules [1].
In terms of currency performance, the British Pound was the strongest against the US Dollar among major currencies, with GBP up 0.26% against USD on the day. Key resistance is identified at the 1.3400 area, with further upside targets at the June 15 and July 10 highs near 1.3455. On the downside, support is seen at 1.3330, with additional levels at 1.3290 and 1.3270 [1].
CONCLUSION
The GBP/USD pair is showing resilience above 1.3350, supported by technical factors and positive sentiment following recent political developments in the UK. Market participants are closely watching upcoming US CPI data and Federal Reserve commentary for further direction. The Pound's outperformance against the Dollar highlights ongoing investor confidence in the UK currency.