GBP/USD churned near its 50-day EMA on Wednesday as rising US interest rates followed the US attack on Iran. DailyForex analyst Christopher Lewis notes the pair held slightly positive, helped by UK rates sitting above most peers, and sees a path toward 1.35 if the pound recaptures 1.34.
The British pound traded back and forth on Wednesday around its 50-day EMA. A 200-day EMA sits overhead as a further barrier, and DailyForex’s Christopher Lewis reads the standoff as the market working through an area of heavy traffic rather than choosing a direction.
Even as US interest rates climbed following the US attack on Iran, the pound stayed slightly positive into the close. Lewis attributes that resilience to UK rates sitting higher than most others, including the US, which keeps sterling relatively supported despite a firmer dollar backdrop.
Lewis frames GBP/USD as a barometer of US dollar strength rather than a standalone trade. If the pair breaks down from here, he expects weakness to spread to currencies such as the New Zealand dollar and the Australian dollar, which he says have little reason to strengthen in a strong greenback environment.
On the upside, a recapture of the 1.34 level would open a move toward 1.35, according to Lewis. He notes the pound has ranged since roughly the spring of 2025, with overshoots in each direction, and identifies 1.35 as the middle of that band. Barring a sharp dollar surge or a broad risk shock, he leans toward the pair eventually finding its way back there.
Source: DailyForex
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