Insights 
VT 
The Pound Sterling has risen for the second day straight, increasing by 0.65% against the US Dollar. The GBP/USD pair is currently trading just below 1.34, ahead of impending policy meetings from the Federal Reserve and the Bank of England.
In North American trading hours, the GBP/USD approached 1.3390. This appreciation comes as the US Dollar’s strength weakens, with the Dollar Index dipping below 99.50 as markets await the Federal Reserve’s policy decision.
Technical Analysis Insight
Technical analysis shows the GBP/USD trying to maintain gains from previous sessions, hovering around 1.3300 in Asian trading hours. The pair’s short-term momentum appears neutral as it lingers near the nine-day Exponential Moving Average.
This recent movement in the Pound follows a broader softening in the Greenback, which has lost some of its earlier resilience as traders position themselves ahead of rate guidance from both the Fed and the BoE. Hosking from Barclays noted last week that immediate reactions to rate statements have become less predictable, with second-day movements often reversing initial impulses. That pattern could hold if upcoming speeches from policymakers inject uncertainty into an already delicate market.
The Dollar’s drop below 99.50 on the Index points to a shift in short-term sentiment rather than any broader reassessment of fundamentals. If anything, it reflects a thinning of long positions built over the past two months. While inflation data out of the US has come in mixed recently, it has yet to justify the sort of hawkish response that might fortify the Greenback meaningfully in the near term.
Against this backdrop, the Pound’s climb to just under 1.34 isn’t being driven by domestic data so much as external positioning. West from Nomura pointed out in a recent note that UK rate pricing has barely moved, even as US expectations have oscillated in a relatively narrow band. That divergence hints that this pairing’s strength is being shaped more by the Dollar’s weakness than any newfound demand for Sterling assets. From our angle, the price action looks less like a vote of confidence in the UK economy and more a function of relative indifference between the two currencies.
Observing Market Levels
Price-wise, the area around 1.3390 has acted as a cap in recent sessions. This level reasserting itself during New York hours might signal participants are taking profits ahead of the Fed’s announcement. During the early Asian session, the pair was marking time near 1.3300, close to the nine-day EMA, which tends to attract short-term interest when momentum is unclear. It’s the kind of level that usually invites two-way trading.
With momentum still neutral on most intraday indicators, directional conviction is hard to pin down. The move above 1.3350 was not backed by widening differentials in rate markets or a run-up in UK economic surprises. That tells us traders may be leaning on technical rather than macro cues for guidance at the moment. More broadly, option markets are flagging higher implied volatility around the upcoming central bank decisions, with risk reversals slightly favouring downside protection in Sterling over the next week.
From our position, this sets up an environment where traders may want to limit exposure to directional bets ahead of rate statements. Instead, emphasis may be better placed on monitoring shorter-dated vol curves and intraday correlation with US macro releases. The pair remains sensitive to rate commentary and forward guidance, particularly as liquidity thins towards month-end.
Worth keeping an eye on the 1.3250–1.3400 range as it has attracted substantial flow over the past sessions. A clear break outside this range, especially with confirmed volume support, could pull stop orders into play and produce an outsized move.
