• GBP/USD struggles to attract any meaningful buyers, though the downside seems limited.
• The hot US inflation data fuels Fed hike bets, underpinning the USD and capping the pair.
• Soft US bond yields and the Hormuz optimism act as a headwind for the safe-haven buck.

The GBP/USD pair is seen consolidating near the lower end of its weekly range, below the 1.3600 mark, during the Asian session on Thursday. The downside, however, remains cushioned as traders look for more cues about the US Federal Reserve’s (Fed) interest rate path before placing fresh directional bets.

Data released on Wednesday showed that the US Personal Consumption Expenditures (PCE) Price Index rose 3.7% over the 12 months through July, unchanged from the previous month and slightly above consensus estimates. This pointed to still-sticky US inflation and backs the case for at least one Fed rate hike by the end of this year. The outlook, in turn, helps the US Dollar (USD) preserve the overnight gains and acts as a headwind for the GBP/USD pair.

However, the US Treasury’s buyback strategy keeps US bond yields depressed, which, along with the optimism over a potential US-Iran deal and the reopening of the Strait of Hormuz, caps the safe-haven buck. In fact, media reports suggest that the US and Iran have reached a new ceasefire deal that would be announced in the coming days. Furthermore, Iran and Oman have agreed on a temporary maritime route for commercial ships travelling through the waterway.

Gharibabadi, however, warned that the strait will not fully reopen until the US fulfills its commitments under an interim peace deal signed in June. This keeps the geopolitical risk premium in play, acting as a tailwind for crude oil prices and the Greenback. Traders also seem hesitant and opt to wait for Fed Chair Kevin Warsh’s scheduled speech at the Jackson Hole Symposium on Friday, which should provide a fresh impetus to the USD and the GBP/USD pair.

GBP/USD daily chart

Technical Analysis

The GBP/USD pair keeps the near-term capped tone below the 1.3660-1.3665 supply zone. A convincing break through the said barrier, however, would be seen as a fresh trigger for bullish traders and open the way for an extension of the advance.

On the downside, prior consolidation pockets around the mid-1.3400s and low-1.3300s act as intermediate reference areas where dips could attract buying interest, keeping the broader recovery structure intact.