GBP/USD holds above 1.35 as Iran deadline and UK data wave loom
- The US-Iran ceasefire faced collapse after Washington seized an Iranian cargo ship days before Wednesday's expiry.
- Risk sentiment held firm despite oil's 6% jump to $89, with the Pound firming as the US Dollar broadly softened.
- UK jobs, CPI and PMIs join US Retail Sales and Kevin Warsh's Fed confirmation hearing in a packed week.
GBP/USD advanced 0.1% on Monday, trading around 1.3530 after pulling back from last week's peak near 1.3600. The pair has spent recent sessions consolidating between 1.3500 and 1.3600, with small-bodied daily candles pointing to hesitation following the strong recovery from early April lows close to 1.3160. Bullish momentum has cooled at the top of the range.
The Iran story remains the dominant macro driver this week, with the two-week US-Iran ceasefire set to expire Wednesday night and President Trump publicly calling an extension "highly unlikely." The US seizure of an Iranian cargo ship in the Gulf of Oman over the weekend pushed tensions to the brink, prompting Iran's Revolutionary Guard to threaten retaliation and reassert closure of the Strait of Hormuz until the US naval blockade is lifted. Even so, markets remain reluctant to price the downside: West Texas Intermediate futures jumped more than 6% to $89 a barrel overnight, yet equity futures firmed and the US Dollar broadly softened on the view that another ceasefire extension will ultimately materialize.
Monday's calendar was limited to the International Monetary Fund (IMF) Meeting and second-tier New Zealand data, but the week ahead is stacked. Tuesday brings the UK labor market report alongside US Retail Sales and Kevin Warsh's hearing before the Senate Banking Committee as Fed Chair-designate, where his prepared remarks emphasize fighting inflation and keeping the Fed "in its lane." Wednesday's UK Consumer Price Index (CPI) print is the week's standout for the Pound, followed by Thursday's flash Purchasing Managers Index (PMI) readings out of both the UK and the US, with UK Retail Sales and the University of Michigan (UoM) sentiment data closing the week on Friday. Despite the packed slate, Iran headlines are still expected to dominate.
GBP/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, GBP/USD trades at 1.3534. The pair holds above the day’s open at 1.3485, keeping a mildly constructive intraday bias despite the latest pullback from earlier highs. The Stochastic RSI at 18.85 sits in oversold territory, hinting that downside momentum may be slowing as price consolidates at elevated levels relative to the session open.
On the downside, initial support aligns with the day’s open near 1.3485, where a break would undermine the current positive tone and expose a deeper corrective phase. With no nearby technical resistance levels provided by moving averages or Fibonacci retracements, short-term topside progress will likely depend on whether oversold Stochastic RSI conditions can fuel another bounce away from the 1.3485 floor.
In the daily chart, GBP/USD trades at 1.3535, holding a clear bullish bias as price extends above both the 50-day and 200-day exponential moving averages (EMAs). The pair is supported by the 50-day EMA near 1.3421 and the 200-day EMA around 1.3358, with their upward slope hinting that the broader uptrend remains intact despite the latest stretch higher. However, the Stochastic RSI at 93.74 sits deep in overbought territory, suggesting that upside momentum is stretched and that the risk of a corrective pullback is rising even within the prevailing bullish structure.
On the downside, initial support emerges at the 50-day EMA around 1.3421, with a deeper floor seen at the 200-day EMA near 1.3358, where dip-buying interest could reappear if a correction unfolds. On the topside, while no clear nearby price-based resistance is highlighted by moving averages, the extreme Stochastic RSI reading warns that fresh gains may become harder to sustain, and any failure to hold above the 1.34 area would weaken the immediate positive tone.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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