GBP/USD Analysis: Key Technical Levels Ahead of Fed Meeting

The GBP/USD pair experienced downward pressure during Tuesday's session, despite limited fundamental drivers behind the broader U.S. dollar strength. The primary data point supporting the dollar was the U.S. durable goods orders report for September, which rose 1.8%, outperforming the expected 1.5% increase. However, the greenback gained ground throughout the trading day prior to the release.

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From a structural perspective, the recent decline in sterling is evaluated as a technical correction within an ongoing broader uptrend. Market fundamentals heading into upcoming central bank events continue to support the currency pair, with expectations pointing toward a eventual advance toward the 1.3650 level, which marks the upper boundary of the daily trading channel.

Traders are focusing on the Federal Reserve's monetary policy decision and subsequent remarks from officials, including Kevin Warsh. With no economic reports scheduled from the UK today, major price movement is anticipated during the evening sessions. Attention will also turn to the Bank of England's interest rate decision scheduled for next week.

Technical Analysis and Key Levels

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The technical structure for GBP/USD remains aligned with a broader bullish framework across daily and weekly timeframes. The uptrend remains valid provided price action stays above the key Senkou Span B dynamic support line at 1.3277. A sustained break below this line would signal an invalidation of the current trend structure.

Key support levels for trading sessions are identified at 1.3301–1.3309, 1.3248, 1.3179–1.3187, 1.3096–1.3115, and 1.3042–1.3050. On the upside, primary resistance zones are established at 1.3369–1.3377, 1.3465–1.3480, 1.3588, and 1.3671–1.3681. Additional dynamic reference levels include the Kijun-sen line at 1.3357 and the Senkou Span B at 1.3277.

For short-term execution, holding below the 1.3301–1.3309 zone opens potential short targets at 1.3277 and 1.3248. Conversely, a confirmed rebound from the 1.3301–1.3309 area favors long positions targeting the 1.3369–1.3377 resistance level.

Commitments of Traders (COT) Data

According to the latest Commitments of Traders (COT) report dated October 20, non-commercial traders increased their net long position in the British pound by 26,500 contracts. During the reporting week, commercial speculators opened 10,000 long contracts and liquidated 16,500 short contracts.

Although short positions dominated institutional volume over preceding months, the net weekly build indicates recovering sentiment. Broader macro factors, including U.S. trade policy dynamics and geopolitical developments in the Middle East, continue to influence long-term dollar trends alongside technical chart patterns.

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