GBP/USD Forecast: Bulls try to keep Pound Sterling above key support

GBP/USD has stabilized near 1.2500 following Monday's decline.
A four-hour close below 1.2480 could open the door for additional losses.
Investors could move to the sidelines ahead of Wednesday's key events.

Eren Sengezer FXStreet

GBP/USD seems to have stabilized at around 1.2500 early Tuesday after having stage a deep downward correction on Monday. The pair's near-term technical outlook fails to provide a directional clue but buyers could remain interested in Pound Sterling as long as 1.2480 support holds.

Following a quiet European session on Monday, the US Dollar (USD) gathered strength against its rivals as the US Treasury bond yields started to push higher ahead of this week's highly-anticipated Federal Reserve policy meeting. With the benchmark 10-year US T-bond yield rising more than 4% and reclaiming 3.5%, the US Dollar Index advanced to the 102.00 area.

Early Tuesday, markets stay relatively quiet and GBP/USD consolidates Monday's losses. The only data from the UK showed earlier in the day that the Nationwide Housing Prices rose by 0.5% on a monthly basis in April but failed to trigger a noticeable market reaction.

In the second half of the day, JOLTS Job Openings data for March will be featured in the US economic docket. In February, job openings declined to 9.9 million from 10.4 million in January and the USD weakened against its rivals. Hence, a similar market reaction could be expected. Investors, however, could refrain from making large bets ahead of the Fed's policy announcements.

In the meantime, US stock index futures trade virtually unchanged on the day, supporting the idea of further consolidation in the pair.

GBP/USD Technical Analysis

The lower limit of the long-term ascending regression channel forms key support level at 1.2480. If the pair makes a four-hour close below that level, it could extend its slide toward 1.2450 (100-period Simple Moving Average (SMA) on the four-hour chart) and 1.2400 (200-period SMA; static level, psychological level).

On the upside, GBP/USD could advance toward 1.2550 (mid-point of the ascending channel) and 1.2600 (psychological level, static level, upper limit of the ascending channel) if it manages to confirm 1.2500/1.2510 area (psychological level, 20-period SMA) as support.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold trades with caution as Fed’s policy takes centre stage

Gold reflects a subdued performance at around $4,000 in the opening session on Tuesday, as financial markets shifty their focus to the Federal Reserve’s monetary policy announcement on Wednesday.

Ripple secures OCC approval for National Trust Bank

Brad Garlinghouse, CEO of Ripple, announced in an X post on Monday that the Office of the Comptroller of the Currency (OCC) has granted final approval to charter Ripple National Trust Bank (RNTB). The federally supervised national bank demonstrates Ripple's progress toward building digital asset infrastructure within a regulated financial system.

France tests the Euro's nerve: What the OAT spread is telling FX traders

France's 10-year borrowing premium over Germany hit its widest since the 2011 debt crisis last week. With public spending above 57% of GDP, unrest on the streets and a presidential election next spring, cuts look unlikely. If Paris cannot trim, the bill may be paid quietly through financial repression.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.