GBP/USD Price Analysis: Rises back above the 1.2200 mark, supported by 50-DMA

GBP/USD bull run pauses ahead of FOMC meeting.
Odds are rising for BoE’s potential pause in a rate hike.
UK CPI data are likely to be overshadowed by the Fed decision.

GBP/USD's bull run stalls at a long-ended descending trendline originating from the 1.3768 mark on a daily timeframe. This bullish surge is driven by broad-based US Dollar weakness amid falling US Treasury yields. Additionally, increasing expectations for the Bank of England (BoE) to pause rates at their upcoming meeting also support the bullish momentum for Cable.

With the bullish bias intact, a convincing break above the trendline could propel the pair toward the twice-tested 2023 high. Downside declines will likely be limited by the 50-Day Moving Average (DMA), situated below the previous day's low at around 1.2146. A convincing break below this level would likely lead the pair to confront the 21-DMA at the 1.2016 level.

The last line of support is observed at 1.1800, beyond which there is a vast uncharted territory.

The Relative Strength Index (RSI) signals a higher high, supporting further bullish momentum.

Market participants are now focused on the UK Consumer Price Index (CPI) data released on Wednesday and the highly anticipated Federal Reserve (Fed) policy decision. The significance of the upcoming Fed meeting is likely to overshadow the UK's CPI data.

All key levels will be monitored closely during the Fed event.

GBP/USD: Daily chart

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP extends recovery as on-chain activity grows

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.