GBP/USD Struggles to Maintain MomentumOANDA:GBPUSD GBP/USD (Cable) struggled to maintain momentum after briefly breaking through the psychological level of 1.3500 (a 1.5-week high) the previous day.
The spot price reversed course and weakened slightly to around 1.3485 in today's Asian session, pressured by a modest rise in the US dollar (USD) triggered by the latest military escalation in the Middle East.
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✅ Fundamental Dynamics: Geopolitical Pull Against USD Correction Trend
The US dollar's strength was driven by a combination of physical tensions and monetary expectations:
- ⚡CENTCOM Military Action: Reports that US forces launched self-defense airstrikes against Iranian missile sites and minesweepers dashed optimism about a ceasefire last weekend. The conflict, now entering its third month, continues to block 20% of global oil supply, maintaining a safe-haven premium for the USD.
- ⚡Inflation & Fed Rate Concerns: A renewed surge in crude oil prices has fueled concerns that inflation will become stubborn again. Market participants responded by increasing hawkish speculation, with the probability of the Federal Reserve raising interest rates by 25 bps by the end of the year climbing to 41% according to the CME FedWatch Tool.
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✅ Critical Price Levels to Watch
- ⚡Immediate Resistance (1.3517): The 61.8% Fibonacci level, which serves as a key gateway to retest the recent swing high at 1.3649.
- ⚡Crucial Support (1.3460): If this level is decisively broken at the close of the New York session, bullish sentiment will be extinguished, opening the door to a decline to the 38.2% Fibonacci level at 1.3435.
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