Key Moments
- GBP/USD traded below 1.3600 despite a modest intraday rebound, as renewed demand for the US Dollar limited upside.
- Geopolitical tensions involving Iran and firmer expectations of a hawkish Federal Reserve underpinned USD strength.
- Technical signals stayed mixed, with GBP/USD holding above the 100-period EMA at 1.3538 while momentum indicators remained inconclusive.
GBP/USD Struggles to Build on Early Rebound
The GBP/USD pair saw some buying interest at the start of the week, but the recovery lacked momentum and failed to lift spot prices above the 1.3600 level. During the Asian session on Monday, the pair remained capped as fresh US Dollar demand emerged.
Earlier optimism about a possible US-Iran agreement faded quickly after renewed tensions in the Strait of Hormuz and continued disagreements over Tehran’s nuclear activities. These developments, together with a pickup in expectations for a more hawkish US Federal Reserve, strengthened the USD and curtailed the rebound in GBP/USD from the 1.3550-1.3545 support area.
BoE Stance and UK Political Signals Support Sterling
On the other side, the British Pound retained some support from the Bank of England (BoE), which has indicated that interest rate hikes could be appropriate if inflation pressures persist. In addition, easing concerns around UK Prime Minister Keir Starmer’s position helped limit downside for the currency.
These factors continue to provide a counterbalance to USD strength, offering a tailwind for GBP/USD and suggesting that traders should be cautious before positioning for a more pronounced decline in the pair.
Technical Outlook: Support Intact, Momentum Mixed
From a technical standpoint, GBP/USD is trading above the 100-period Exponential Moving Average (EMA), which points to a slightly constructive short-term bias. However, momentum indicators present a more cautious picture. The Relative Strength Index (RSI) is hovering near the neutral 50 mark, while the Moving Average Convergence Divergence (MACD) has slipped modestly back below zero.
These conditions indicate that the current upward move is tentative rather than strong. As a result, a more convincing bullish case would likely require a sustained break above the horizontal resistance near 1.3635, accompanied by a clearer improvement in momentum signals. Only then would traders have greater confidence in calling for a continuation of the broader advance in GBP/USD seen over roughly the past month.
On the downside, initial technical support is reinforced by the 100-period EMA at 1.3538. A decisive move below this level would open the door to a deeper corrective phase toward earlier lows. As long as the pair remains above this moving average, buyers retain a near-term advantage and a consolidation or base-building phase could persist, particularly in the absence of significant new macroeconomic catalysts.
US Dollar Performance Against Major Currencies
The following table shows the percentage change of the US Dollar (USD) against major counterparts today. The USD showed its largest gain versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | — | 0.29% | 0.36% | 0.27% | 0.12% | 0.24% | 0.43% | 0.37% |
| EUR | -0.29% | — | 0.07% | -0.04% | -0.19% | -0.05% | 0.15% | 0.08% |
| GBP | -0.36% | -0.07% | — | -0.11% | -0.24% | -0.11% | 0.09% | -0.00% |
| JPY | -0.27% | 0.04% | 0.11% | — | -0.15% | 0.00% | 0.18% | 0.10% |
| CAD | -0.12% | 0.19% | 0.24% | 0.15% | — | 0.16% | 0.28% | 0.24% |
| AUD | -0.24% | 0.05% | 0.11% | -0.01% | -0.16% | — | 0.18% | 0.11% |
| NZD | -0.43% | -0.15% | -0.09% | -0.18% | -0.28% | -0.18% | — | -0.05% |
| CHF | -0.37% | -0.08% | 0.00% | -0.10% | -0.24% | -0.11% | 0.05% | — |
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