Subdued USD keeps British Pound consolidating just below 1.3400, near September 16 highs

Recent sharp gains remain intact for GBP/USD as several supportive factors underpin the pair.
The USD faces pressure from lower US bond yields, while expectations of a BoE rate hike lend support to the GBP.
Further USD declines and upside in spot prices could be restrained by geopolitical risks and a hawkish Fed.

Bullish sentiment continues to underpin GBP/USD, with the fundamental backdrop appearing to favour an extension of its week-long uptrend. During Thursday's Asian session, the pair consolidates its recent advance just below 1.3400, remaining close to the highest level since 16 September reached earlier this week.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Support for the British Pound (GBP) comes from increasing confidence that the Bank of England (BoE) will raise interest rates in November, after UK consumer price inflation climbed to an 11-month high in September. By contrast, falling US bond yields leave the US Dollar (USD) struggling to draw meaningful buying interest, with the currency hovering near Tuesday's almost three-week low. Together, these factors support GBP/USD and reinforce the favourable outlook.

The possibility of further escalation in Middle East tensions continues to sustain the geopolitical risk premium. Iran's Foreign Minister Abbas Araghchi said Tehran is ready to give diplomacy another opportunity, provided it sees convincing evidence that the US sincerely wants to reach a just solution. In a separate report, The New York Times said the US and Israel have prepared plans for a potential fresh round of strikes on Iran following the US midterm elections.

By supporting crude oil prices, these developments add to inflation risks and reinforce expectations of an imminent interest rate increase by the Federal Reserve (Fed). CME Group's FedWatch Tool indicates that traders currently assign around a 90% probability to a December increase in US borrowing costs. As a result, downside in the safe-haven Greenback remains limited, discouraging traders from initiating fresh bullish positions in GBP/USD or positioning for additional gains.

What does the GBP/USD daily chart show?

Technical Analysis: Where Could GBP/USD Break Next?

With GBP/USD holding just above its 100-day Simple Moving Average (SMA), the near-term outlook remains broadly neutral, although a tentative base appears to be forming above this dynamic support. Immediate resistance at the 50.0% Fibonacci retracement of 1.3404 and the lower 38.2% retracement at 1.3341 bracket the current price action. This narrow range points to consolidation while traders wait for a more decisive directional breakout.

Above the current range, the next resistance levels lie at the 61.8% retracement near 1.3467 and the 78.6% retracement at 1.3557, followed by the swing high area of 1.3672. Initial downside support sits at the 100-day SMA of 1.3389, ahead of the 38.2% retracement at 1.3341. Below that level, a break would bring the 23.6% retracement near 1.3263 into focus, while the structural low around 1.3137 provides a more distant support floor.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Has Pound Sterling Performed Over the Last 7 Days?

Against the US Dollar, the British Pound recorded its strongest performance over the last 7 days. The table below sets out the percentage changes in the British Pound (GBP) against the major currencies listed for that period.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.71%	-1.51%	-0.08%	-1.37%	-0.81%	-1.98%	-1.32%
EUR	0.71%		-0.84%	0.59%	-0.75%	-0.10%	-1.28%	-0.65%
GBP	1.51%	0.84%		1.40%	0.11%	0.71%	-0.54%	0.22%
JPY	0.08%	-0.59%	-1.40%		-1.21%	-0.69%	-1.87%	-1.19%
CAD	1.37%	0.75%	-0.11%	1.21%		0.52%	-0.67%	0.11%
AUD	0.81%	0.10%	-0.71%	0.69%	-0.52%		-1.17%	-0.48%
NZD	1.98%	1.28%	0.54%	1.87%	0.67%	1.17%		0.66%
CHF	1.32%	0.65%	-0.22%	1.19%	-0.11%	0.48%	-0.66%

Percentage movements between the major currencies are displayed in the heat map. To read a currency pair, select its base currency in the left-hand column and its quote currency in the top row. For instance, choosing the British Pound on the left and following that row across to the US Dollar gives the percentage change for GBP (base)/USD (quote) in the corresponding cell.