The GBP/USD pair has been struggling for a second consecutive day to gain a firm foothold above the round 1.3700 level. The U.S. dollar (USD) has slightly recovered from yesterday's decline, which is the main factor putting pressure on the GBP/USD pair. This strengthening is likely due to position rebalancing, with bears inclined to lock in losses ahead of the key FOMC meeting. The Federal Reserve will conclude its two-day meeting on Wednesday, announcing its monetary policy decision, which is expected to leave interest rates unchanged.

Particular attention will be paid to the press conference with Fed Chair Jerome Powell, whose comments will be analyzed for hints about the pace of future rate cuts. These signals could significantly affect the short-term dynamics of the U.S. dollar and set the direction for GBP/USD. At the same time, expectations of two Fed rate cuts in 2026 may limit the dollar's recovery and provide support for the pair.

The British pound continues to draw support from positive fundamental indicators, including strong retail sales and PMI data released last Friday, which weakened short-term expectations of a rate cut by the Bank of England. In the absence of new economic releases from the UK, GBP/USD will remain under the influence of the U.S. dollar today.

From a technical perspective, the pair has found support at the 1.3660 level. Resistance is seen at the round 1.3700 level. It is also worth noting that oscillators on the daily chart are in overbought territory, confirming consolidation. Nevertheless, the path of least resistance for the pair remains to the upside.