United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann observe that GBP/USD’s surge to 1.3434 has stretched short-term conditions, but further gains toward a retest of 1.3435 remain possible, with 1.3465 unlikely to break. Over 1–3 weeks, they expect range trading in a higher 1.3340–1.3465 band after shifting from a negative to neutral stance, with momentum not yet strong enough for a sustained advance.
Pound holds firm but capped near resistance
“24-HOUR VIEW: While we expected GBP to “edge lower” yesterday, we indicated that “any decline is likely part of a lower range of 1.3330/1.3395.” We added that GBP “is unlikely to break clearly below 1.3330.” GBP subsequently broke below 1.3330 (low of 1.3325), but it then lifted off and surged to a high of 1.3434. While the rapid rise has room to extend, overbought conditions suggest that any advance is likely limited to a retest of 1.3435. The next resistance at 1.3465 is unlikely to come under threat. Support is at 1.3385; a breach of 1.3365 would indicate that GBP is more likely to range-trade rather than retesting 1.3435.”
“1-3 WEEKS VIEW: We revised our view from negative to neutral yesterday (11 Jun, spot at 1.3365). We indicated that the earlier “downward momentum has faded, and for the time being, GBP is likely to trade in a range between 1.3300 and 1.3435.” GBP then dipped to 1.3325 and then soared, testing the upper boundary of our range with a high of 1.3434. Upward momentum has increased, but not sufficiently to indicate a sustained advance. For the time being, we continue to expect range-trading, though the range has shifted higher to 1.3340/1.3465.”
GBP/USD gains some positive traction as easing inflationary concerns weigh on the USD.
Fed rate hike bets and rising US-Iran tensions should limit USD losses and cap spot prices.
The mixed technical setup, too, warrants caution before positioning for further upside.
The GBP/USD pair attracts some dip-buyers during the Asian session on Tuesday and stalls the previous day’s pullback from the 1.3425 region, or the weekly high. Spot prices currently trade around the 1.3385 zone, up just over 0.10% for the day, though the upside potential seems limited.
The US Dollar (USD) edges lower as soft US Core Consumer Price Index (CPI) eased concerns about a runaway inflation spiral and turned out to be a key factor acting as a tailwind for the GBP/USD pair. Traders, however, are still pricing in a 70% chance that the US Federal Reserve (Fed) will hike interest rates by the end of this year. Apart from this, renewed hostilities between the US and Iran help limit deeper USD losses, capping the upside for the currency pair.
From a technical perspective, the GBP/USD pair keeps a bearish near-term bias beneath the 200-period Simple Moving Average (SMA) on the 4-hour chart, which coincides with the 50% Fibonacci retracement level of the recent slide from the 1.3655 region. Moreover, repeated failures to build on the momentum beyond the 23.6% Fibo. level warrants caution before positioning for any meaningful appreciating move in the near-term, despite improving momentum indicators.
The Moving Average Convergence Divergence (MACD) histogram remains slightly positive, while the Relative Strength Index (RSI) hovers near the neutral 50 mark. This hints at modest underlying demand but not yet enough to challenge the prevailing topside barriers at 1.3438 (38.2% level) and the 1.3475-1.3480 confluence – the 200-period SMA on the 4-hour chart and the 50% Fibo. Above that, the GBP/USD pair could rise to deeper Fibo. hurdles at 1.3520 and 1.3579.
On the downside, structural support is only clearly defined near the recent swing low anchor at 1.3305. A convincing break below this floor would likely reassert bearish momentum and make the GBP/USD pair vulnerable to further weakness. The broader setup, however, reinforces the idea of a market that is consolidating under medium-term resistance.
(The technical analysis of this story was written with the help of an AI tool.)
GBP/USD 4-hour chart
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.13%
-0.13%
-0.03%
-0.05%
-0.08%
-0.06%
-0.21%
EUR
0.13%
-0.00%
0.09%
0.07%
-0.06%
0.09%
-0.08%
GBP
0.13%
0.00%
0.11%
0.08%
-0.04%
0.10%
-0.08%
JPY
0.03%
-0.09%
-0.11%
-0.02%
-0.16%
-0.02%
-0.17%
CAD
0.05%
-0.07%
-0.08%
0.02%
-0.13%
0.02%
-0.16%
AUD
0.08%
0.06%
0.04%
0.16%
0.13%
0.15%
-0.05%
NZD
0.06%
-0.09%
-0.10%
0.02%
-0.02%
-0.15%
-0.17%
CHF
0.21%
0.08%
0.08%
0.17%
0.16%
0.05%
0.17%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
GBP/USD gains traction to near 1.3390 in Wednesday’s early European session.
Iranian officials warned Gulf states have a “legal and moral responsibility” to prevent US and Israeli strikes.
The US May CPI inflation report will take center stage on Wednesday.
The GBP/USD pair trades in positive territory around 1.3390 during the early European trading hours on Wednesday. Markets might turn cautious later in the day ahead of the US May Consumer Price Index (CPI) inflation report. On Friday, the monthly UK Gross Domestic Product data will be in the spotlight.
Financial markets had expected the Bank of England (BoE) to cut interest rates twice this year to 3.25%. Since the US-Iran war began, the situation has reversed, and now a rise of 25 basis points (bpd) before December is projected, according to CNBC.
Nonetheless, the potential upside for the British Pound (GBP) might be limited as renewed tensions in the Middle East weigh on the riskier assets. Iran’s Foreign Minister Abbas Araghchi on Wednesday warned that its neighbors in the Gulf have a “legal and moral responsibility” to prevent American and Israeli strikes.
This statement came as the US launched retaliatory strikes against Iran on Tuesday in what it called a proportional response to the shooting down of a US helicopter gunship near the Strait of Hormuz a day earlier.
The US CPI inflation report will be closely watched as it could give some hints about the US interest rate path. If the reports show hotter-than-expected outcomes, this could lead traders to price in a higher probability of the Federal Reserve (Fed) raising interest rates, which would provide some support to the USD against the GBP.
GBP/USD rises to near 1.3375 as the US Dollar corrects sharply.
US President Trump sees a total victory over Iran in the next two weeks.
Investors await the US CPI data for May and the UK GDP data for April.
The GBP/USD pair trades 0.26% higher at around 1.3375 during the European trading session on Tuesday. The Cable gains as the US Dollar (USD) declines amid expectations that the United States (US) could reach a deal with Iran soon.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.12%
-0.20%
-0.03%
-0.14%
-0.26%
-0.54%
-0.20%
EUR
0.12%
-0.06%
0.09%
-0.02%
-0.11%
-0.40%
-0.06%
GBP
0.20%
0.06%
0.17%
0.06%
-0.07%
-0.32%
0.00%
JPY
0.03%
-0.09%
-0.17%
-0.11%
-0.22%
-0.50%
-0.16%
CAD
0.14%
0.02%
-0.06%
0.11%
-0.11%
-0.37%
-0.05%
AUD
0.26%
0.11%
0.07%
0.22%
0.11%
-0.26%
0.06%
NZD
0.54%
0.40%
0.32%
0.50%
0.37%
0.26%
0.32%
CHF
0.20%
0.06%
-0.01%
0.16%
0.05%
-0.06%
-0.32%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.17% lower to near 99.83.
On late Monday, US President Donald Trump expressed confidence that a “total victory” on Iran can be announced in two weeks, adding it would lead to a sharp decline in oil prices. The statement from Trump came after Iran agreed to halt attacking the Israeli territory, which led to a sharp decline in oil prices.
The US Dollar has outperformed in the past few months as elevated oil prices due to the energy supply crisis prompted the US inflation and hawkish Federal Reserve (Fed) bets.
The appeal of currencies from economies, such as the United Kingdom (UK), which rely heavily on oil imports to meet their energy needs, improves when oil prices start falling.
Going forward, investors will focus on the US Consumer Price Index (CPI) data for May and the UK Gross Domestic Product (GDP) data for April, which will be released on Wednesday and Friday, respectively.
GBP/USD technical analysis
GBP/USD trades higher at around 1.3375 at the press time. However, the near-term tone remains bearish as it holds below the 20-period Exponential Moving Average (EMA), which is at 1.3428. The pair sits between an upward support trend line break around 1.3312 and the reclaimed downward resistance trend line reference at 1.3593, exhibiting a broader sideways trend. The Relative Strength Index (RSI) near 42 leans soft, hinting that downside pressure persists even if not yet overstretched.
On the topside, initial resistance is located at the 20-EMA around 1.3430, and a sustained break above this barrier would open the way toward the former downtrend resistance line reference near 1.3590. On the downside, immediate support emerges at the prior uptrend support break zone around 1.3301, and a drop below there would expose lower levels. The major support area would be the April 7 low at 1.3217, followed by the March 31 low at 1.3159.
The British Pound (GBP) is struggling as mounting political uncertainty and deteriorating economic indicators complicate the United Kingdom’s outlook. Ahead of the key Gross Domestic Product (GDP) April data to be released on Friday, financial markets are balancing the risk of an economic contraction against the probability of further interest rate hikes by the Bank of England (BoE) to rein in energy-driven inflation.
With internal political friction intensifying due to a high-stakes leadership challenge within the ruling Labour Party, major financial institutions are turning increasingly cautious on the Pound’s near-term trajectory.
GBP/USD daily chart. Source: FXStreet.
Sluggish economic growth and fiscal concerns threaten to drag Pound lower
Macro strategists at Brown Brothers Harriman (BBH) warn that the combination of a potentially contracting UK economy and stagflationary pressures leaves the British Pound deeply exposed to a downward correction against the US Dollar. They emphasize that while anticipated central bank interventions may try to curb price pressures, structural damage to the UK’s fiscal credibility from potential political reshuffling could rapidly worsen a currency undershoot.
We expect GBP/USD to fall to 1.3100, reflecting a stronger US growth outlook relative to the UK. BOE rate hikes in a sluggish growth, high inflation environment, is not bullish for GBP but should help cushion the downside.
Uncertainty over the next BoE moves
Economists at Societe Generale suggest that any near-term political noise surrounding Manchester Mayor Andy Burnham’s bid for the Labour leadership will likely yield limited radical change. On the monetary front, they acknowledge that while hawkish voices within the BoE’s Monetary Policy Committee (MPC) are pushing hard for an immediate rate increase, the broader consensus will likely favor a more conservative wait-and-see strategy.
We expect these members [those opting for a rate hike] to remain in the minority and for the BoE to keep rates on hold in June.
Banks anticipate a downward-biased trajectory for the British Pound
The banks anticipate a soft trend for the British Pound. Brown Brothers Harriman maintains an explicitly bearish outlook, forecasting a drop to the 1.3100 mark for the GBP/USD
Brown Brothers Harriman’s Elias Haddad (BBH) highlights downside risks for the Pound as UK GDP is expected to contract in Q2 and markets price further Bank of England (BoE) hikes due to second-round inflation effects. Haddad forecasts GBP/USD lower and warns that domestic politics, including the Makerfield by-election and potential leadership challenges, could exacerbate any Pound undershoot.
Soft growth and political risk pressure Sterling
“UK April GDP is due Thursday. Real GDP is expected to fall -0.1% m/m vs. +0.3% in March and track below the Bank of England’s (BOE) baseline Q2 forecast of +0.1% q/q. PMI data indicate UK real GDP could contract by -0.2% q/q in Q2.”
“Nevertheless, the swaps curve implies 64bps of BOE rate hikes to between 4.25% and 4.50% in the next twelve months because of upside risk to second-round effects in price and wage-setting stemming from the energy shock. A first full 25bps BOE rate rise is priced-in for the September 17 meeting.”
“We expect GBP/USD to fall to 1.3100, reflecting a stronger US growth outlook relative to the UK. BOE rate hikes in a sluggish growth, high inflation environment, is not bullish for GBP but should help cushion the downside.”
“The UK political backdrop can amplify a GBP undershoot. Attention is increasingly shifting to the June 18 Makerfield by-election.”
GBP/USD posts modest losses near 1.3340 in Monday’s early European session.
Intensified geopolitical tensions in the Middle East weigh on the British Pound.
BoE’s Bailey signaled the central bank is in “no rush” to raise interest rates.
The GBP/USD pair trades with mild losses around 1.3340 during the European trading hours on Monday. Ongoing tensions in the Middle East and rising bets of a US interest rate hike provide some support to the US Dollar (USD) against the British Pound (GBP).
The BBC reported on Monday that the Israel Defense Forces (IDF) said that it struck military targets in western and central Iran, hours after Iran fired a salvo of missiles at northern Israel. Iranian officials said that any attack from Israel against Lebanon or Iran would be met with a “crushing and comprehensive response.”
Additionally, Iran’s ambassador to Moscow, Kazem Jalali, said that the Strait of Hormuz will be open but under new conditions to be set by Iran and Oman, including a transit fee, per Reuters. Escalating tensions in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair in the near term.
The US economy posted a third straight month of strong job gains in May, with the US Nonfarm Payrolls (NFP) rising by 172K in May, the Bureau of Labor Statistics reported on Friday. This figure followed the 179K increase (revised from 115K) and was better than the forecast of 85K. This robust jobs data has reignited expectations that the Fed may raise the interest rate later this year, lifting the USD.
On the UK’s front, Bank of England (BoE) governor Andrew Bailey delivered dovish remarks, saying that the UK central bank is in no rush to raise interest rates while the outcome of the Iran war remains uncertain and the UK’s growth rate stays weak.
Financial markets had expected the BoE to cut interest rates twice this year to 3.25%. Since the US-Iran war began, the situation has reversed, and now a rise of 25 basis points (bpd) before December is forecast, according to CNBC.
GBP/USD stays calm as a firm US Dollar draws safe-haven support from stalled US-Iran peace talks and Middle East tensions.
Closing the Strait of Hormuz raises energy prices and inflation, keeping Fed interest rates higher for longer.
BoE’s Megan Greene grew hawkish, backing faster rate hikes because response speed is as vital as size.
GBP/USD moves little following a four-day winning streak, trading around 1.3470 during the Asian hours on Wednesday. The pair steadies as the US Dollar (USD) remains firm, driven by stalled US-Iran peace negotiations and renewed tensions in the Middle East, continued to underpin safe-haven demand.
Iran launched ballistic missiles toward neighboring Kuwait and Bahrain. The United States Central Command (CENTCOM) said on Tuesday that it had intercepted and defeated a series of Iranian missile and drone attacks targeting regional neighbors, including Kuwait and Bahrain, while also carrying out self-defence strikes on Iran’s Qeshm Island, per ABC News.
A prolonged closure of the Strait of Hormuz threatens to drive energy prices higher and intensify global inflationary pressures, reinforcing expectations that the Federal Reserve (Fed) will maintain elevated interest rates for an extended period.
This higher-for-longer outlook is heavily supported by a resilient US economy, highlighted by the ISM Manufacturing PMI climbing to 54 in May 2026, up from 52.7 in the prior two months and beating forecasts to mark the strongest factory expansion since May 2022.
Further evidence of economic strength appeared in the labor market, where April JOLTS data showed Job Openings surging to a nearly two-year high of 7.6118 million alongside declining layoffs. With robust manufacturing and employment data complicating the inflation outlook, investors are now anxiously awaiting Friday’s Nonfarm Payrolls report for definitive clues on the future trajectory of monetary policy.
Bank of England (BoE) policymakers maintained a firm stance on inflation. Policymaker Megan Greene delivered hawkish remarks, signaling a growing justification for interest rate hikes and emphasizing that “the speed of the response is arguably just as important as its size.” Her comments follow statements from BoE Governor Andrew Bailey, who stressed the importance of public confidence in the central bank’s commitment to returning inflation to its 2% target.
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