Insights 
VT 
The GBPUSD has reached a new low, affected by increased bearish momentum. The pair is trading below its 100-day moving average at 1.33339, which acted as a temporary support but has now shifted, with sellers dominating.
This decline in price makes the technical outlook more negative, maintaining a bearish trend. Focus has shifted to the 38.2% retracement of the 2025 move, from low to high, at 1.31403. This level aligns with a crucial swing area between 1.3145 and 1.3202, creating an important target.
Price Dynamics and Key Levels
If the price falls below this region, sellers might gain more momentum. The current battle is between the resistance at the 100-day moving average and the support range of 1.3140–1.3200.
The Federal Open Market Committee is expected to meet soon, with rates likely remaining unchanged. The potential shift of the Federal Reserve to a more dovish approach is uncertain, particularly with anticipated inflation increases due to tariffs.
We are seeing GBP/USD break below its 100-day moving average, a technically bearish signal for the weeks ahead. As long as the pair stays below 1.33339, the path of least resistance is lower. This shift suggests that strategies favoring a weaker pound against the dollar should be considered.
Fed Meeting and Market Strategies
The primary downside target is the zone between 1.3140 and 1.3202. This area is significant as it represents the 38.2% Fibonacci retracement of the entire 2025 rally. Traders should view this level as a likely magnet for price in the near future.
The focus now shifts to the Federal Reserve’s meeting later today, which will be the main driver of volatility. A dovish tilt is anticipated due to concerns about new tariffs impacting the economy. This would likely weaken the US dollar and accelerate the move towards our 1.3140 target.
This market nervousness is justified when we look at recent data. The US CPI for June 2025 showed an unexpected rise to 3.1%, largely attributed to the new tariffs on UK and EU goods that were introduced last month. The market believes the Fed will prioritize growth over fighting this specific type of inflation.
We can look back at the Fed’s pivot in late 2018 as a historical guide for this situation. Faced with similar trade war pressures and slowing global growth, the central bank shifted from a tightening bias to an easing one, which caused notable dollar weakness. This precedent supports the expectation of a softer tone from the Fed today.
Given this outlook, traders could consider buying put options on GBP/USD with expiration dates in August or September 2025. Strikes around the 1.3200 level would offer a way to capitalize on the expected slide toward the key retracement zone. This approach defines risk to the premium paid while providing exposure to the anticipated downward move.
