British Pound weakens as USD demand recovers; can it defend 1.3300 ahead of key US data?

Renewed demand for the USD brings fresh selling pressure on GBP/USD in the Asian session.
The dollar finds support as oil-led inflation worries sustain expectations of a Fed rate hike.
With key US economic releases in focus, geopolitical uncertainty lends additional support to the USD.

Renewed selling pressure weighs on GBP/USD during Thursday's Asian session, interrupting the previous day's rebound from the 1.3275-1.3270 zone, a nearly two-week low. A broadly stronger US Dollar (USD) has pushed the pair down to 1.3300 over the past hour. However, bearish traders have reason to remain cautious as sustained follow-through selling has yet to emerge.

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

Concerns that elevated energy prices could fuel inflation are supporting expectations of another Federal Reserve (Fed) rate increase this year, helping the USD recover from the previous day's post-FOMC decline. Traders now price in around an 80% probability of the US central bank raising borrowing costs again in December, according to the CME Group's FedWatch Tool. Continuing geopolitical uncertainty also supports the dollar's safe-haven appeal, adding some downward pressure on GBP/USD.

Efforts to revive peace talks form the latest backdrop to the Middle East crisis. US Vice President JD Vance reportedly wrote to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, to help restart negotiations, even as US President Donald Trump threatens renewed military action in the coming weeks. According to The Wall Street Journal, US officials have advised several Middle East countries and regional allies to prepare for a possible brief but intense military campaign against Iran after the November 3 midterm elections.

To avert a resumption of the war, regional mediators led by Qatar are seeking to bring the US and Iran back to negotiations. At the same time, dollar bulls may hold off on fresh positions until there is greater clarity on the Fed's policy trajectory beyond December. Attention therefore turns to the Advance US Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index. Expectations that the Bank of England (BoE) will tighten monetary policy could, meanwhile, cushion the downside in GBP/USD.

GBP/USD on the 4-hour chart

Can GBP/USD Retain Its Near-Term Bullish Bias?

Trading above the 100-period Simple Moving Average (SMA) on the 4-hour chart and the mid-range Fibonacci support levels leaves GBP/USD with a mildly bullish near-term outlook. The pair is currently just above the 38.2% retracement. This points to a constructive tone as prices test the upside towards the upper end of the recent recovery range.

The first resistance level lies at 1.3352, the 23.6% Fibonacci retracement, followed by the cycle-high anchor near 1.3417. Immediate downside support stands at 1.3311, corresponding to the 38.2% retracement. Below that, the 50.0% level at 1.3278 precedes further Fibonacci support at 1.3246 and 1.3199, while the 1.3140 area forms a more distant structural base.

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

How Is the US Dollar Performing Today?

The US Dollar recorded its strongest performance against the Euro today. The table below sets out the percentage changes in the US Dollar (USD) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.07%	0.02%	0.03%	-0.10%	-0.10%	-0.02%	0.05%
EUR	-0.07%		-0.05%	-0.04%	-0.19%	-0.18%	-0.10%	-0.03%
GBP	-0.02%	0.05%		0.00%	-0.14%	-0.13%	-0.05%	0.01%
JPY	-0.03%	0.04%	0.00%		-0.14%	-0.13%	-0.07%	0.00%
CAD	0.10%	0.19%	0.14%	0.14%		0.01%	0.09%	0.16%
AUD	0.10%	0.18%	0.13%	0.13%	-0.01%		0.09%	0.14%
NZD	0.02%	0.10%	0.05%	0.07%	-0.09%	-0.09%		0.10%
CHF	-0.05%	0.03%	-0.01%	-0.01%	-0.16%	-0.14%	-0.10%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency from the left-hand column and the quote currency from the top row. For instance, choosing the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.