The dollar's safe-haven demand, combined with rising UK inflation expectations, keeps the GBP/USD exchange rate fluctuating at low levels.

Tongtong Finance APP News—— In Tuesday’s Asian session, the GBP/USD has slipped to around 1.3220. Earlier rebound momentum has weakened somewhat. Overall, under the influence of multiple factors, the exchange rate is showing a choppy consolidation and sorting pattern, and the near-term direction remains unclear.

From the external environment, the continued tension in the Middle East remains an important factor driving market sentiment. The risks around the Strait of Hormuz have not been resolved. U.S. President Donald Trump emphasized that the current ceasefire proposal is “still not enough,” set a deadline, and warned of taking further action. This uncertainty has driven safe-haven funds into the U.S. dollar, putting downward pressure on the pound.

Meanwhile, U.S. economic data has been somewhat lackluster. According to data released by the Institute for Supply Management, in March the services-sector PMI fell to 54.0, below market expectations, indicating that the expansion momentum in the services sector has slowed to some extent. To a certain degree, this limits upside room for the dollar, keeping the pound’s decline relatively contained.

On the UK side, expectations for monetary policy have become an important factor supporting the pound. Some policy makers at the Bank of England have shifted from previously supporting rate cuts to leaning toward holding interest rates steady. At the same time, driven by rising energy prices, UK inflation expectations have clearly warmed up. The market expects CPI to rise to the 3%-3.5% range over the coming few quarters. This expectation reinforces the likelihood of keeping interest rates at elevated levels, thereby providing some support to the pound.

However, from an overall structural perspective, the dollar’s safe-haven attribute is more dominant in the current stage—especially while geopolitical risks have not been eased, funds are more inclined to flow into U.S. dollar assets, which limits the pound’s rebound space.

From a technical perspective, at the daily level, overall GBP/USD is still in an adjustment phase following the broader choppy upward move. Price was capped and pulled back near prior highs, suggesting heavier selling pressure overhead. The current key resistance level lies in the 1.3300-1.3350 range. If it fails to break through, the exchange rate may extend its consolidation trend. The support level is at 1.3150, with further support at 1.3050. Momentum indicators show that upward momentum has weakened, and in the short term conditions are biased toward choppiness.

At the 4-hour level, the exchange rate is showing a choppy downward structure, with highs gradually moving lower and the short-term trend remaining weak. The moving average system is tending toward a bearish arrangement, and the RSI is running in a neutral-to-weak area, indicating the market is somewhat bearish in the short run. If it breaks below 1.3150, it may further test 1.3050. If it rebounds and breaks above 1.3300, it is likely to regain strength.

Editor’s Summary：

The current GBP/USD trend is influenced by two factors: “U.S. dollar safe-haven demand” and “UK interest rate expectations.” Although the Middle East situation is pushing the dollar higher, rising UK inflation and a policy shift provide support for the pound, preventing the exchange rate from seeing a sharp drop. In the short term, against the backdrop of geopolitical risks and macro data interweaving, GBP/USD may maintain a range-bound choppy pattern, and the next direction will depend on the dollar’s performance and changes in policy expectations.

(Editor: Wang Zhiqiang HF013）

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