- GBP/USD loses momentum to near 1.3445 in Friday’s early European session.
- Iranian official said the US will ‘pay the price’ for killing Iranian civilians.
- The constructive outlook of the pair remains intact above the 100-day SMA, with bullish RSI momentum.
- The initial support level to watch is 1.3400; the first upside barrier is located at 1.3515.
The GBP/USD pair trades in negative territory around 1.3445 during the early European trading hours on Friday. Heightened Middle East tensions and rising global oil prices provide some support to a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP). The Michigan Consumer Sentiment Index will be published later on Friday.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf on Thursday denounced the US attack on civilian homes on Qeshm Island, describing it as a continuation of American crimes in the southern Iranian cities of Minab and Lamerd. Earlier on Thursday, the US launched missile strikes across southern Iran, including Qeshm Island as well as parts of Bushehr, Fars and Khuzestan provinces.
Financial markets have priced in a more than 90% chance of the Bank of England (BoE) keeping borrowing costs on hold, with the outside chance of a hike. Traders expect a rise in borrowing costs to 4.0% before the end of the year.
BoE seen on hold as softer UK inflation eases pressure
Analysts at Brown Brothers Harriman note that the Bank of England is “widely expected to keep the policy rate at 3.75% for a fifth straight meeting,” arguing that a “less worrisome UK inflation backdrop gives the BoE room to stand pat.” In their view, the recent moderation in price pressures allows policymakers to maintain the current stance without rushing to adjust rates, reinforcing expectations for an extended pause in the tightening cycle.
Technical Analysis:
In the daily chart, GBP/USD holds a modest bullish bias as spot remains above the 100-day simple moving average (SMA) and the Bollinger middle band around, suggesting underlying dip-buying interest after recent consolidation. The Relative Strength Index (RSI) at about 57 stays in positive but not overbought territory, hinting that upside momentum is constructive yet still measured.
On the downside, immediate support is seen around the 100-day SMA at 1.3400, reinforced by the nearby Bollinger middle band at roughly 1.3390, while a deeper cushion emerges at the lower Bollinger band near 1.3265 should sellers regain control. On the topside, initial resistance aligns with the upper Bollinger band around 1.3515; a sustained break above this cap would open the door for the July 15 high of 1.3558.
