GBP/USD recorded a slight rise against the US dollar in early trading on Monday, trading around 1.3555. Investors widely expect the Federal Reserve to announce its first interest rate cut of the year at its policy meeting on Wednesday, which put pressure on the US dollar and supported the pound.

At the same time, the market will also pay attention to the US September New York Fed Manufacturing Index to be released on the same day to further judge the economic momentum.

According to market tools, investors believe that the probability of the Federal Reserve cutting interest rates by 25 basis points is close to 100%, and some even believe that a larger interest rate cut that "exceeds expectations" may occur.

This bet stems from recent signs of a weakening U.S. job market. Federal Reserve Chairman Powell has previously emphasized that the future policy path will depend on economic data, so the market will also pay close attention to the economic forecasts released at this meeting and guidance on the future interest rate path.

A foreign exchange strategist at an international investment bank pointed out: "The market has almost fully digested the expectation of the Federal Reserve cutting interest rates in September. If the statement releases more dovish signals, the US dollar may face a new round of downward pressure."

Meanwhile, UK economic fundamentals are performing poorly. GDP growth stagnated in August, in line with expectations, while factory output data for July showed no improvement. This has fueled market concerns about continued weakness in the UK economy. If the economy lacks momentum for recovery, the likelihood of another Bank of England interest rate cut before the end of the year increases.

According to market research, traders have priced in a 33% probability of the Bank of England cutting interest rates again before the end of the year. This could weaken support for the pound in the medium term and make its rebound against the dollar less sustainable.

A commentator at a London research institute said: "The pound will still benefit from the weakening of the US dollar in the short term, but the UK economy lacks growth momentum, and monetary policy expectations may in turn suppress the pound in the coming months."

Judging from the daily chart, GBP/USD has received obvious support around 1.3500, and short-term moving averages (such as the 10-day and 20-day moving averages) have maintained a moderate upward trend, providing a bottom for the exchange rate.

In terms of technical indicators, the RSI remains in the neutral zone, indicating that buying power is limited, but there is still room for further rebound. If the exchange rate can break through the 1.3600 resistance level, it may open an upward channel and point to 1.3700.

On the contrary, if it falls below 1.3450, the pound will face a new round of downward pressure and may retrace to the 1.3400 level in the short term.

Editor's Note: The current rise in the pound against the dollar is more dependent on the dollar's weakness than any improvement in the pound's fundamentals. With the Federal Reserve's policy direction imminently clarified, pound bulls may face a reassessment risk. Amidst sluggish UK economic growth and expectations of potential interest rate cuts, the pound's future trajectory is likely to remain volatile rather than unilaterally buoyant.