Technical Analysis:
Sterling showed notable resilience into Tuesday's New York session close, ending the day up modestly at 1.3380 (+0.13%) after a brief slide to session lows near 1.3336. Despite repeated struggles to sustain breaks above the psychologically crucial 1.3400 level, persistent U.S. fiscal concerns continue to buoy GBP/USD, keeping dips relatively contained. Technically, the pair remains well supported above its rising short-term moving averages, specifically the 10-DMA (1.3292) and the upward-trending 30-DMA (1.3269), reinforcing bullish market sentiment ahead of the critical release of UK inflation data early Wednesday.

On the upside, immediate technical resistance for GBP/USD lies clearly at the 1.3404 high from Monday, just ahead of the closely watched 2025 high at 1.3445 (recorded on April 28). A convincing daily close above this significant technical barrier would signal the next leg of bullish momentum, targeting higher objectives around the upper 30-day Bollinger Band at 1.3511. Longer-term technical targets remain oriented toward early-2022 highs near 1.3600–1.3640. Traders will closely monitor the UK CPI release, as data suggesting resilient economic growth and controlled inflation could fuel a powerful bullish impulse beyond these resistance levels.

Downside risks remain limited, though immediate short-term support is found at Tuesday’s low of 1.3336, with subsequent support layers at the ascending 10-DMA (1.3292) and 30-DMA (1.3269). If UK inflation data significantly disappoints, a deeper corrective move below the 30-DMA could materialize, potentially targeting more pivotal technical support at the 50% Fibonacci retracement of the recent 1.2712–1.3445 rally near 1.3079. Nonetheless, with markets currently pricing a stable BoE rate trajectory and ongoing U.S. dollar headwinds from fiscal and trade uncertainties, any such corrective downside for GBP/USD is likely to attract renewed buying interest.