GBP/USD Under Pressure from Strong US Dollar and Risk-Off Sentiment
The GBP/USD currency pair is facing a strong US Dollar and an increasingly risk-off environment. The market environment has changed, and analysts expect volatility ahead of central bank meetings tomorrow and Thursday.
The British Pound's resilient UK activity and relatively hawkish rates outlook are being offset by energy-driven inflation and growth risks. Meanwhile, the US Dollar is expected to rise with a 90% chance of a rate hike by the Fed tomorrow.
From a technical analysis perspective, the GBP/USD price action has been consolidative over the past year, making a range between approximately 1.3650 and 1.3100. However, the current bearish trend is supported by a notable lower high that rejected a new resistance level at 1.3513.
The best opportunities for a short trade may set up today as a rejection of the nearest resistance level at 1.3493, with an entry taking you back down to 1.3465 at least.