GBP/USD rebounds above 1.3350 as dollar softens before Fed decision

GBP/USD has recovered from its six-day decline, climbing back above 1.3350 as the US dollar weakened on Tuesday amid anticipation of Federal Reserve policy adjustments. The sterling's recovery marks a potential reversal after dropping nearly 200 pips from recent highs, with traders positioning ahead of the Fed's upcoming rate decision. Market participants are pricing in a high probability of a rate cut, which has pressured the greenback across major pairs. The pound found support near the 1.3300 psychological level, with technical indicators suggesting oversold conditions after the recent selloff. Immediate resistance lies at 1.3400, followed by the 1.3450 area where the 50-day moving average converges. A dovish Fed stance could propel the pair toward 1.3500, while any hawkish surprise might renew selling pressure. Traders should monitor US Treasury yields and Fed communications for near-term directional cues.