Why Is GBP/USD Struggling Below 1.3300? | Key Factors Driving Sterling Weakness Against Dollar

Market Dynamics Behind GBP/USD's Bearish Trend

The Cardano coin ada price chartBritish pound commenced weekly trading with notable weakness against the US dollar, relinquishing Friday's minor recovery from three-week lows near 1.3200. During Asian session hours, the currency pair hovered around 1.3280-1.3275 levels, marking a 0.20% daily decline as greenback strength dominated forex markets.

Primary Drivers of USD Appreciation

Several fundamental factors contributed to the dollar's broad-based strength:

• The weekend announcement of a US-China trade agreement following intensive negotiations in Switzerland alleviated immediate recession concerns
• The Federal Reserve's recent decision to maintain restrictive monetary policy continues supporting dollar valuations
• Improved risk sentiment following the trade deal reduced demand for alternative safe-haven currencies

Countervailing Factors Supporting Sterling

While dollar strength pressured GBP/USD downward, certain developments limited the pair's decline:

• The US-UK bilateral trade agreement signed last Thursday provided some underlying support
• Bank of England officials reiterated their commitment to maintaining elevated interest rates until inflation shows sustained moderation
• Technical indicators suggest the currency pair remains within its recent trading range

Market Participants Await Policy Signals

Traders appear cautious about establishing aggressive positions ahead of scheduled speeches from:

• Bank of England Monetary Policy Committee members
• Influential Federal Open Market Committee officials

These forthcoming remarks may provide clearer indications about future monetary policy trajectories in both economies, potentially determining GBP/USD's next directional move. Market technicians note the pair's recent consolidation pattern suggests potential for breakout momentum once fundamental catalysts emerge.

Technical Considerations

The currency pair's three-week trading range between 1.3200 and 1.3400 continues containing price action. Analysts suggest monitoring:

• Support levels near Friday's lows around 1.3200
• Resistance near the psychological 1.3400 handle
• Moving average convergence/divergence patterns for momentum clues

Until either fundamental developments or technical breaks provide clearer signals, many market participants may maintain range-bound trading strategies for GBP/USD.