FX.co ★ GBP/USD

The British pound fell against the US dollar for the second consecutive day on Monday, fluctuating around the psychological level of 1.3500 during the Asian trading session. Despite a slight downward bias, the spot price did not show a strong bearish trend and remained above its lows from last week, prompting market participants to exercise caution before adopting any further bearish strategies. The main factor supporting the dollar's strength was the growing market expectation that the Federal Reserve would adopt a tighter monetary policy and raise interest rates at its upcoming meeting in September. This shift in market sentiment stemmed from optimistic monthly employment forecasts driven by strong non-farm payroll growth and persistent inflation risks stemming from rising energy prices. Furthermore, escalating geopolitical tensions and maritime clashes between the US and Iran in the Strait of Hormuz contributed to the dollar's safe-haven appeal, putting pressure on major currency pairs such as the pound/dollar. However, dollar bulls appeared hesitant to push the exchange rate higher, preferring to remain neutral ahead of the release of key US Consumer Price Index (CPI) and Producer Price Index (PPI) reports later this week. Meanwhile, secondary market factors are expected to influence the future trajectory of the British pound, particularly the UK's monthly GDP report due on Friday. Trading volumes were relatively low in Asia and at the start of European trading due to the US Labor Day holiday, which naturally limited aggressive short positions and provided a potential buffer for the pound. Therefore, technical analysts suggest waiting for continued selling below key structural support levels before confirming whether the pound's decline from its multi-month highs in August will continue. Technically, the pair continues to hold above the key moving average support level, consolidating above the 50-day simple moving average at around 1.3460, which closely aligns with the 38.2% Fibonacci retracement level of the June-August rally. Momentum indicators suggest a relatively neutral stance, with the Relative Strength Index (RSI) hovering around 48.7, while the Moving Average Convergence Divergence (MACD) is trending slightly lower. These technical indicators suggest that bullish momentum may be weak in the short term, as the pair remains above key support levels. From a short-term technical perspective, the primary protection against further declines lies in the 1.3470-1.3460 support zone, which is formed by the 50-day simple moving average and the 38.2% Fibonacci retracement level. Should selling pressure intensify in this area, further support is expected at the 50.0% Fibonacci retracement level near 1.3407, in addition to deeper technical levels at 1.3345, 1.3255, and 1.3141. Conversely, immediate upside resistance lies at the 23.6% Fibonacci retracement level near 1.3548. A decisive break above this resistance could trigger a move towards the recent highs near 1.3673, opening the way for a stronger medium-term rally.