- GBP/USD struggles to capitalize on a modest intraday uptick to the 1.3500 neighborhood.
- Fed hike bets, elevated US bond yields and geopolitics underpin the USD, capping the pair.
- Bears await a break below the 200-day SMA as the focus remains on the crucial Fed decision.
The GBP/USD pair attracts fresh sellers following an intraday uptick to the 1.3500 neighborhood and drops to the lower end of its daily range during the first half of the European session on Wednesday. Spot prices currently trade around the 1.3470-1.3465 region, just above a one-month low touched on Tuesday, as traders keenly await the outcome of a two-day FOMC meeting.
Heading into the key central bank event, growing acceptance that the US Federal Reserve (Fed) will stick to its hawkish stance amid oil-driven inflation risks and elevated US bond yields acts as a tailwind for the US Dollar (USD). Apart from this, escalating tensions in the Middle East underpin the safe-haven buck, capping the GBP/USD pair, which fails to benefit from the expected rise in UK consumer inflation.
Spot prices sit near the 38.2% Fibonacci retracement, while remaining above the 200-day Simple Moving Average (SMA) at 1.3455 and the 50.0% retracement at 1.3406. The latter should act as a key pivotal point, which, if broken, will be seen as a fresh trigger for GBP/USD bears. Meanwhile, momentum oscillators hint at the risk of a shallow consolidation rather than a strong continuation higher in the near term.
Meanwhile, weakness below the 200-day SMA at 1.3455 should pave the way for deeper pullbacks toward the 50.0% retracement at 1.3406 and the 61.8% level at 1.3343. A break below the latter would negate the broader bullish structure. On the topside, initial resistance is seen at the 23.6% Fibo. retracement around 1.3548, with a stronger barrier at the recent swing high around the 1.3675 region.
- GBP/USD Price Forecast: Fails near 1.3500 as bears eye 200-SMA ahead of Fed decision
- Euro remains depressed as Eurozone sentiment and trade data fail to inspire
- Gold struggles near multi‑week low as Fed hike bets and geopolitical risks boost USD
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