GBP/USD is struggling to hold the 1.3200 level in early European trading on Tuesday, consolidating after Monday’s sharp pullback from a five-week high at 1.3276. The pair stays on the defensive as expectations grow that the Bank of England (BoE) will cut rates at its December 18 meeting, a view reinforced by broad USD strength.
Policy expectations overshadow budget boost
The brief lift from the UK Autumn Budget has faded, with traders focusing instead on central bank expectations in the absence of major data releases from either the UK or the US on Tuesday. The possibility of an imminent rate cut keeps bearish pressure on the Pound Sterling (GBP), while the US Dollar (USD) benefits from a steady bid across global markets.
Chart analysis GBP/USD
From a short-term technical standpoint, the daily chart shows a modest uptick in the 21-day Simple Moving Average (SMA), while the 50-day and 100-day SMAs continue to slope lower. Despite the 200-day SMA edging higher, GBP/USD remains below the 50-, 100- and 200-day moving averages, although it is still trading above the 21-day SMA. The Relative Strength Index (RSI) (14) sits near neutral at 51.47, pointing to stabilizing momentum after the latest rebound.
Immediate support emerges at the 21-day SMA at 1.3149, while initial resistance is seen at the 50-day SMA around 1.3270. A daily close above this level could start to ease persistent bearish pressure.
Shorter-term SMAs remain positioned below the longer-term gauges, keeping the broader bias tilted to the downside until the pair clears these overhead barriers. The 200-day SMA is rising at 1.3318, with the 100-day SMA descending at 1.3370, forming a resistance band that continues to cap upside attempts.
With the RSI hovering around 51 – well away from overbought territory – a decisive move above the 200-day SMA could pave the way toward the 100-day marker. Conversely, failure to hold above nearby supports would leave sellers firmly in control.
