Andrew Bailey

GBP/USD is holding above a critical support zone after the dollar rally paused ahead of Federal Reserve minutes. Technical traders are watching 1.3172 closely, with a break potentially opening the way toward 1.3000.

GBP/USD has pulled back from this month’s high as investors reassess Federal Reserve policy risk after a hawkish Jackson Hole message. Technical traders are watching 1.3470 as the next downside area if sellers keep control.

Softer United States inflation has reduced market expectations for an imminent Federal Reserve rate increase, keeping the US Dollar Index in consolidation beneath nearby resistance. EUR/USD and GBP/USD remain technically sensitive as traders watch whether euro and sterling strength can extend against the dollar.

GBP/USD retreated to around 1.3400 as traders assessed rising geopolitical risk, firmer energy prices, and a busy macro calendar. Technical traders are watching whether fading momentum opens the door to a move toward 1.3300 or whether buyers can reclaim 1.3500.