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Today, the GBP/USD pair is attempting to regain positive momentum and rise above the key psychological level of 1.3400, aiming to break a multi-day losing streak. However, spot prices remain near the 3.5-week low reached on Tuesday, indicating that the risk of the downtrend observed over the past two weeks still persists.
The main factor pressuring the GBP/USD pair is the strengthening of the US dollar. The greenback has reached price levels last seen on June 23, supported by a declining likelihood of near-term rate cuts by the Federal Reserve, due to concerns that the tariffs imposed by President Donald Trump's administration could fuel inflation in the US.
Tuesday's consumer inflation data confirmed these concerns, and comments from members of the Federal Open Market Committee (FOMC) point to the Fed's intention to keep interest rates elevated for an extended period. Additionally, broader weakness in equity markets is boosting demand for the dollar as a safe-haven asset, further limiting GBP/USD's upward potential.
On top of that, the British pound is struggling to attract strong buyers amid growing expectations of a rate cut by the Bank of England in August. Even the positive UK Consumer Price Index (CPI) figures failed to provide meaningful support to the GBP/USD pair.
Looking ahead, traders will focus on the upcoming release of the US Producer Price Index (PPI), due later today during the North American session, which could offer fresh trading opportunities.
Technical Outlook:On the daily chart, oscillators remain in negative territory, suggesting that prices are struggling to break and hold above the 1.3400 level. If this level is breached, the next resistance is seen around 1.3450, followed by 1.3475. Beyond that lies the key psychological level of 1.3500, which currently aligns with the 50-day Simple Moving Average (SMA).
On the other hand, the pair has found support near 1.3380. A break below this level could lead to a decline toward the 1.3300 psychological mark.
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