• GBP/USD is trading near 1.3350, up for a second consecutive day, as traders eye central bank decisions from both sides of the Atlantic.
• The Fed will announce its monetary policy decision on Wednesday, and is expected to keep interest rates steady.
• The BoE will release its interest rate decision on Thursday, after a fresh batch of UK Employment data.

The GBP/USD pair is trading near the 1.3350 price region on Tuesday, striking a bullish tone as investors continue to move away from the US Dollar (USD) ahead of the Federal Reserve (Fed) monetary policy decision on Wednesday.

The Fed’s policy dilemma is being tested by rising energy prices tied to the Middle East war. Higher Oil prices are potentially delaying rate cuts, as officials balance persistent inflation risks against slowing growth. The core Personal Consumption Expenditures (PCE) Price Index accelerated to 3.1% YoY in January from 3% in December, signalling stalled progress toward the 2% goal, putting interest-rate cuts in jeopardy.

The Middle East war keeps markets under tension as the Strait of Hormuz is still partially seized by Iran. The United States (US) President Donald Trump is trying to gather allies to rally against the blockade, but has not yet been successful.

In the United Kingdom (UK), the Bank of England (BoE) will also reveal its interest rate decision on Thursday, with market players expecting a hawkish hold. Earlier in the day, UK Employment data is set to be released hours before the BoE interest rate decision. The data, however, isn't likely to significantly impact the pair, as the interest rate decision will already be set.

GBP/USD short-term technical analysis:

In the 4-hour chart, GBP/USD trades at 1.3340. The near-term bias is mildly bullish as the pair stabilizes above a cluster of supports. Price holds above the 20-period Simple Moving Average (SMA) near 1.3300 but remains below the 100-period SMA around 1.3400, framing a corrective rebound within a broader softening backdrop. The Relative Strength Index (RSI) indicator has rebounded toward 54 after dipping below 50 in the European session, signaling improving upside pressure after a prior downside stretch.

Immediate support is seen at 1.3299, with a break lower exposing the next floor at 1.3273. Holding above these levels would keep buyers positioned to challenge initial resistance at 1.3360, which guards the descending 100-period SMA near 1.3400. A clear move above 1.3360 would open the way toward the 1.3400 region, while failure to defend 1.3299 would weaken the current recovery bias and refocus attention on 1.3273.

(The technical analysis of this story was written with the help of an AI tool.)