Pound Holds Steady Above 1.3200 Amid USD Strength and Geopolitical Risks

The British Pound (GBP) against the US Dollar (USD) continues to trade within a narrow range, holding above the 1.3200 mark during Tuesday's Asian session. This consolidation reflects the ongoing tug-of-war between hawkish expectations for the Bank of England (BoE) and the bullish sentiment surrounding the USD, which limits the pair's upside potential.

Investors are anticipating tighter monetary policy from the BoE due to persistent inflation driven by high energy prices, which has provided some support to the GBP. Meanwhile, the USD is benefiting from safe-haven demand amid geopolitical tensions and elevated US bond yields. Recent developments, including missile attacks by Yemen's Houthi group on Saudi targets and reports of potential Israeli strikes on Iran, have heightened geopolitical risks, further boosting the USD's appeal.

Economic data released last week showed a moderation in US inflation and weak Nonfarm Payrolls, which has tempered expectations for a Federal Reserve rate hike in October. However, traders still price in over an 80% chance of a rate increase by the end of the year, supporting the USD. The upcoming release of the FOMC Minutes on Wednesday and speeches from key Fed officials will be crucial in shaping market sentiment and influencing the GBP/USD pair's movement.

Technically, the GBP/USD pair remains in a bearish consolidation phase, trading below the 100-period Simple Moving Average (SMA) on the 4-hour chart. A break below 1.3180 could reinforce the negative bias, while a move above the 100-period SMA at 1.3319 would be needed to ease downside pressure and open the way for higher levels.