• GBP/USD licks wounds following its pullback from five-week highs of 1.3276.
• The pair struggles amid growing BoE rate cut bets, despite the UK Budget relief.
• GBP/USD’s daily technical setup shows weakening upside momentum.

GBP/USD is battling 1.3200 in the early European trading hours on Tuesday, consolidating the previous sharp retracement from five-week highs of 1.3276.

Growing expectations that the Bank of England (BoE) will lower the benchmark interest rate at the December 18 monetary policy meeting keep the bearish pressures intact on the Pound Sterling (GBP) amid the latest upswing in the US Dollar (USD) across the board.

Buyers shrug off a temporary reprieve received from the UK Autumn Budget as sentiment surrounding the central bank expectations dominates, in the absence of top-tier economic data releases from both sides of the Atlantic on Tuesday.

From a short-term technical perspective, the daily chart shows that the 21-day Simple Moving Average (SMA) holds a mild uptick, while the 50- and 100-day SMAs continue to slide.

Despite the 200-day SMA edging higher, price remains beneath the 50-, 100-, and 200-day references, though it holds above the 21-day line. The Relative Strength Index (RSI) (14) sits at 51.47, neutral, hinting at stabilizing momentum after the recent rebound.

Initial support is the 21-day SMA at 1.3149, with first resistance at the 50-day SMA at 1.3270. A daily close above the latter could begin to ease bearish pressure.

Shorter-term SMAs stay below the longer ones, reinforcing a bearish bias until the pair reclaims higher moving-average hurdles. The 200-day SMA rises at 1.3318 and the 100-day SMA declines at 1.3370, forming an overhead resistance band that caps recoveries. RSI around 51 does not flag overbought conditions and a firm break above the 200-day SMA could open the path toward the 100-day gauge, while failure to build above nearby supports would keep sellers in control.

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