Today, Wednesday, GBP/USD is showing a negative bias, fluctuating below 1.3660 and erasing part of the significant gains recorded the previous day. At the same time, the pair remains near the August high set last week, as market participants are eagerly awaiting the release of the US Personal Consumption Expenditures (PCE) data, which could provide a new catalyst for the pair. Key inflation indicators and Fed Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday should be analyzed for signals regarding the future direction of the Fed's monetary policy and interest rates. In addition, developments related to the Middle East crisis will have a significant impact on the short-term outlook for both the US dollar and GBP/USD.

It is also worth noting that a communication gap within the Fed is raising concerns about the dollar's outlook.

Philip Wee of DBS Bank argues that recent changes in US Treasury yields point to a significant communication gap within the Fed. He emphasizes that Kevin Warsh needs to clarify how the Fed plans to shape expectations in the absence of clear guidance on possible monetary policy tightening, as well as how responsibilities are divided between the Fed and the Treasury. Wee believes that uncertainty on these issues is undermining confidence in the dollar at a time when investors are already beginning to question the sustainability of high US Treasury yields.

Meanwhile, subdued inflation data and an inactive labor market are fueling expectations that monetary policy will remain unchanged at the FOMC meeting on September 15–16. At the same time, the US Treasury's bond-buying strategy and declining inflation risks amid falling oil prices could lead to a further decline in US Treasury yields, which, in turn, would put pressure on the dollar and support GBP/USD.

Two high-profile officials noted that the Treasury could use nearly $1 trillion in its General Account to finance new plans to buy longer-term bonds.On the geopolitical front, Iran announced the resumption of talks with Oman on regulating commercial shipping through the Strait of Hormuz, which has contributed to lower oil prices for almost two weeks. At the same time, the United States offered Iran sanctions relief and an end to the naval blockade in exchange for reopening the strait and halting attacks by its regional proxies. This has revived hopes for a diplomatic resolution to the conflict between the United States and Iran, further weakening the dollar and prompting caution before taking aggressive bearish positions in GBP/USD.

From a technical perspective, GBP/USD is trading below the 1.3660–1.3665 level, a breakout above which could signal further strength from the bulls and open the way for additional gains. Despite the current correction, the short-term trend remains tilted to the upside, although failure to break above this level could indicate a deeper corrective move below the round-number level of 1.3600, bringing the pair back toward 1.3570. The oscillators are positive, confirming the bulls' advantage in the market. Meanwhile, the Relative Strength Index (RSI) is gradually moving out of oversold territory, which could allow the pair to continue higher.