FX.co ★ Sud | GBP/USD

During Monday's European trading session, the British pound retreated against the dollar, giving up its earlier gains to settle around 1.3373. As the dollar recovered from its early lows, the pound's appreciation against the dollar slowed slightly, leading to a minor dip in the Dollar Index (DXY) – which measures the pound's value against a basket of six major global currencies – to around 101.70. Global financial market participants are taking a cautious stance as they await the Federal Reserve's monetary policy announcement on Wednesday. According to CME FedWatch interest rate futures tracking, the vast majority expect the Fed to leave its benchmark interest rate unchanged within the target range of 3.75% to 4.00% at this meeting. However, given persistent energy price inflation and strong overall economic activity, the currency market still anticipates a 25-basis-point rate hike in December, with the probability of such a hike remaining high. In addition to the Federal Reserve's interest rate decision and future guidance, the US economic calendar includes key economic data releases later this week that will significantly impact dollar sentiment. Markets are closely watching the release of preliminary US GDP figures for the third quarter and the core personal consumption expenditures (PCE) price index for September, both due on Thursday. The market widely expects the US economy to have grown at an annualized rate of 3.2% in the third quarter, a notable acceleration from the previous quarter's 2.2%. Strong growth data, coupled with continued PCE inflation, would provide a structural justification for the Federal Reserve to maintain its tight monetary policy. Meanwhile, sterling traders are awaiting the Bank of England's monetary policy decision next week, with widespread expectations that policymakers will raise interest rates by 25 basis points, pushing benchmark borrowing costs to 4.00%, following the recent unexpected surge in UK inflation. From a daily technical chart perspective, the GBP/USD pair is trading around the 1.3370 level, maintaining a moderately positive trend. The spot price remains above the 20-day exponential moving average (EMA) at 1.3323. Buyers continue to actively defend this moving average level, preserving the pair's multi-week recovery. Technical momentum indicators point to a balanced but favorable environment, with the 14-day Relative Strength Index (RSI) holding steady at 54.8, in neutral to positive territory, indicating continued upward momentum and the absence of overbought conditions. On the downside, initial dynamic support is firmly established at the 20-day EMA near 1.3323. A sustained daily close below this technical low would weaken the current uptrend, potentially leading to a deeper correction for the GBP/USD pair towards lower support levels. On the upside, the immediate key resistance lies near last week's high of 1.3420. A decisive break above this level and a daily close above it would confirm the continuation of the broader uptrend, paving the way for buyers to target the psychological level of 1.3500 in the coming trading days.