The British pound held near 1.3400 against the US dollar on Tuesday, pinned to its short-term moving averages, as a strong German investor-sentiment reading steadied Europe’s risk mood and traders waited on UK jobs data and next week’s central bank meetings.
Sterling has traded both ways this month. It sat around 1.3416 late Monday, below Friday’s 1.3454 close, after last week’s rally reached a July high of 1.3558 and then gave way to profit-taking and a firmer dollar. The pair still holds about 1.25% above its July opening level of 1.3250 and well clear of the monthly low near 1.3221.
The technical read is neutral to mildly positive while cable stays above the 1.3340–1.3360 zone; a sustained break below would expose 1.3250 and the July low. That leaves 1.3400, where the nine-day and other short-term EMAs now cluster, as the level traders are watching.
United Overseas Bank frames the same setup as range trading. UOB’s Quek Ser Leang said the earlier bullish bias faded once the pair broke 1.3450, and now sees intraday moves between 1.3420 and 1.3475 inside a wider 1.3385–1.3495 band. Over one to three months, UOB puts support at 1.3210 and 1.3160 and resistance at 1.3610 and 1.3655.
Europe offered some support on Tuesday. Germany’s ZEW gauge of investor expectations, released at midday in Frankfurt, rebounded into positive territory, with the reading reported at 26.3 (a figure still to be confirmed against the official release at the time of writing). It extends a recovery from the spring, when the Middle East conflict drove the index to a three-year low of -17.2 in April. The improvement points to easing energy fears and firmer export and domestic-demand expectations. A steadier euro tends to cap the dollar, which helped keep cable underpinned.
UK politics added a variable. Andy Burnham became prime minister on Monday, replacing Keir Starmer as Britain’s seventh leader in a decade. Burnham, viewed as more left-leaning, has pledged a “circuit breaker” and a new economic model, and the prospect of his rise unsettled UK bond markets earlier this year. Sterling’s near-term path may turn on whether his fiscal plans reassure gilt investors.
Rate policy still sets the frame. The Federal Reserve held its target range at 3.50–3.75% in June and dropped its bias toward cuts, which lifted the dollar. The Bank of England held Bank Rate at 3.75% in a 7–2 vote, with two members pushing for a rise. With the two central banks close to level, GBP/USD is unusually sensitive to data and sentiment.
Three events dominate the near term. UK labour-market figures, due Tuesday, cover employment, wages and payrolls after a prior report showed payrolled staff down 138,000 over the year to April. The Fed decides on July 28–29, and the Bank of England follows on July 30. A soft UK jobs print or a hawkish Fed could push cable toward the low 1.33s; firmer wages or a softer dollar would reopen the test of 1.3500.
