GBP/USD Price Forecast: Defends 1.3200 as bears await two-week-old range breakdown

The GBP/USD pair attracts some dip-buyers near the 1.3200 mark during the Asian session on Tuesday, stalling the previous day's rejection slide from the 100-period Simple Moving Average (SMA) on the 4-hour chart. Spot prices, however, remain confined in a familiar range held over the past three weeks or so, warranting some caution before positioning for any meaningful appreciation.

The British Pound (GBP) gains some ground following the better-than-expected release of British Retail Consortium (BRC) Like-For-Like Retail Sales data. Moreover, comments from Bank of England (BoE) member Megan Greene, saying that she is worried about second-round inflation effects coming into play if the central bank fails to act soon, lend support to the GBP. Apart from this, a modest US Dollar (USD) profit-taking slide from an 18-month peak, which touched on Monday, turns out to be another factor acting as a tailwind for the GBP/USD pair.

Meanwhile, the downside for the USD seems cushioned amid the growing acceptance that the Federal Reserve (Fed) will raise borrowing costs again by the end of this year. Adding to this, inflation risks stemming from volatile energy prices remain supportive of elevated US bond yields. Furthermore, the geopolitical risk premium remains in play amid the US-Iran standoff and intensifying fighting between the Iran-backed Houthi group and the Saudi-led coalition in Yemen, which could limit losses for the safe-haven buck and cap the GBP/USD pair.

From a technical perspective, the range-bound price action might be categorized as a bearish consolidation phase against the backdrop of a fall from the August swing high. Moreover, spot prices hold beneath the 100-period Simple Moving Average (SMA) on the 4-hour chart, which suggests rallies could struggle while this barrier at 1.3255 remains intact amid subdued momentum indicators. The Relative Strength Index (RSI) is hovering just below the 50 line, and Moving Average Convergence Divergence (MACD) readings are marginally negative.

This, in turn, backs the case for an eventual breakdown below the trading range support near 1.3180. The subsequent fall would set the stage for an extension of the downfall from the August monthly swing high near 1.3675. On the top side, any attempted recovery is more likely to attract fresh sellers near the 100-SMA and fade ahead of the 1.3300 mark. A sustained break above the said handle would be needed to ease the current bearish tone and open the way toward higher levels.

GBP/USD 4-hour chart