British Pound: Support at 1.3495 under pressure against US Dollar – UOB

Market impact: Mildly bearish GBP/USD, with near-term downside risk but potential for an initial rebound.

UOB’s assessment shifts the technical balance lower: the pair’s decline to 1.3493 is described as stretched in the very short term, implying that profit-taking or consolidation between 1.3495 and 1.3535 could occur first. However, the more important signal is the developing downside momentum on a one-to-three-week horizon. A sustained close below 1.3495 would weaken the recent support structure and expose 1.3475, while recovery attempts are likely to face heavier resistance near 1.3560.

For traders, the key distinction is between an intraday oversold bounce and a confirmed medium-term breakdown. Holding above 1.3495 would preserve the possibility of range trading and a recovery toward the mid-1.35s. A decisive close below that level would make GBP/USD more vulnerable to follow-through selling, particularly if the US dollar remains supported by firmer US rate expectations.

The fundamental catalyst remains important. FXStreet identified incoming US CPI data as a potential driver of Federal Reserve expectations and dollar valuation; a stronger-than-expected inflation reading could reinforce GBP/USD downside, while a softer result could weaken the dollar and help the pair reclaim lost ground.

Trading interpretation:

bearish below 1.3495 on confirmation, but not an unqualified one-way signal because the immediate decline may be overextended. Monitor the daily close around 1.3495, price behavior near 1.3560, US inflation data, US Treasury yields, and any shifts in expectations for the Federal Reserve and Bank of England.