GBP/USD has returned to a well-defined supply zone around 1.3480–1.3510, but buyers are struggling to establish control above it. The pair has tested this area several times without producing a convincing breakout, while the latest candles show another loss of momentum beneath resistance.

The short-term structure therefore favors a corrective move, although the broader market remains range-bound rather than decisively bearish.

Why This Level Matters

The current supply zone marks the upper boundary of the recent consolidation. Price previously rejected this area near the beginning of August, and the latest recovery has once again stalled before buyers could secure acceptance above 1.3500.

Repeated failure at resistance matters because it shows that demand is not strong enough to absorb the available supply. As long as GBP/USD remains below the zone, sellers retain the opportunity to push price back toward the first support area around 1.3380–1.3400.

That support is particularly important because it previously acted as resistance before the latest bullish expansion. A return there would therefore represent a natural retest of the breakout structure rather than an immediate collapse in sterling.

Market Context

Sterling is currently struggling to find a clear direction. The Bank of England recently kept its policy rate unchanged at 3.75%, citing uncertainty around inflation and the impact of energy prices. Markets are still pricing the possibility of another increase, although some strategists believe expectations for a more hawkish BoE may have become excessive.

The dollar has also regained some demand after trading near a six-week low. Investors are waiting for the next U.S. payroll report, while Federal Reserve officials continue to signal patience amid persistent inflation risks. That leaves GBP/USD vulnerable to short-term dollar strength, especially while the pair remains capped beneath technical resistance.

Trading Scenarios

Bearish scenario: Continued rejection below 1.3480–1.3510 would keep pressure on the pair and expose 1.3380–1.3400. A confirmed break beneath that area could extend the correction toward the major demand zone around 1.3280–1.3310.

Bullish scenario: A decisive four-hour close above 1.3510 would invalidate the immediate bearish view. That would show that buyers have absorbed supply and could reopen the path toward 1.3540–1.3560.

For now, the setup is not about predicting a major sterling reversal. It is about whether sellers can continue defending the same resistance area.

Does GBP/USD reject 1.3500 again, or are repeated tests preparing the zone for a breakout?