GBP/USD is resisting downward pressure as dollar weakness reasserts itself, but sterling needs to chalk up some wins on the charts to regain upward momentum.

The pair has staged a swift rebound from its post-Fed dip to a one-month low of 1.3383, with the greenback slipping on Friday following dovish signals from Fed Governor Christopher Waller. Waller told CNBC that a rate cut could be justified by July if inflation remains tame and downplayed the potential inflationary impact of import tariffs — offering a clear contrast to Powell’s tone from Wednesday.

At present, sterling gains are largely riding on dollar softness rather than underlying pound strength. Earlier cable declines were driven by underwhelming UK May retail sales data. Market attention now turns to next week’s dense schedule of MPC appearances, with Governor Andrew Bailey due before the Lords Economic Affairs Committee on Tuesday and Chief Economist Huw Pill to speak Wednesday — events that could recalibrate expectations for the August BoE decision. Market odds are leaning slightly in favor of a rate cut at that meeting.

Though cable has reclaimed much of the ground lost following the Fed meeting, upside momentum is restrained by Middle East tensions and quarter-end portfolio adjustments. A sustained push higher will require a decisive break above 1.3508—representing the 50% retracement from the YTD high—and 1.3518, which marks the June 13 low and aligns with the 21-day moving average. Only then might the pair set its sights on the 1.3633 year-to-date peak.
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(Robert Fullem is a Reuters market analyst. The views expressed are his own.)