Pound Gains Ground Against Dollar Amid Tight Trading Range

The British Pound (GBP) against the US Dollar (USD) experienced a slight rebound on Tuesday, reaching a fresh daily high near 1.3240. However, the pair remains constrained within a narrow trading range that has persisted over the past two weeks.

The USD weakened slightly as traders took profits from its recent rally to the highest level since April 2025. This provided some support to the GBP/USD pair. Additionally, expectations of tighter monetary policy from the Bank of England (BoE) due to persistent inflation have further bolstered the Pound.

Despite these factors, the USD's downside is limited by ongoing geopolitical tensions in the Middle East and strong expectations of another Federal Reserve rate hike by year-end. Elevated US bond yields are also supporting the USD, capping the GBP/USD pair's upside potential.

Market participants are awaiting the release of the FOMC Minutes on Wednesday and speeches from key Fed officials for further clarity on the Fed's policy path. Meanwhile, the UK's Constructive PMI improved slightly from 44.3 to 46.1 in September, but the market reaction was muted.

Technical analysis suggests that the recent range-bound price action is a bearish consolidation phase. The pair trades below the 100-period Simple Moving Average (SMA) on the 4-hour chart, indicating that recovery attempts remain fragile. A break below 1.3180 could signal further downside pressure.