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GBP/USD Price Forecast: US-Iran reaches deal supports advance beyond 20-day EMA

  • GBP/USD jumps to near 1.3460 as the market sentiment turns favorable for riskier assets.
  • The finalization of an MoU between the US and Iran has improved the market mood.
  • The Fed and BoE are scheduled to announce their monetary policies on Wednesday and Thursday, respectively.

The GBP/USD pair trades 0.35% higher to near 1.3460 during the late Asian trading session on Monday. The Cable extends its week-long advance as market sentiment improves further, following the announcement that the United States (US) and Iran have reached a deal.

At press time, S&P 500 futures are up over 1% and Asian stock markets are exhibiting a broad rally, reflecting a strong risk appetite of investors. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.4% lower at near 99.40.

Pakistan Prime Minister (PM) Shehbaz Sharif has stated in a post on X, formerly known as Twitter, that the finalized memorandum of understanding (MoU) between the US and Iran will be signed on June 19 in Switzerland.

Meanwhile, investors brace for a volatile week, especially for the British Pound (GBP), as an array of United Kingdom (UK) data, including the labor market report for three months ending in April and the Consumer Price Index (CPI) data for May, along with the Bank of England’s (BoE) monetary policy announcement, will be key events to watch out.

In the US, investors will focus on the Federal Reserve’s (Fed) monetary policy, which will be announced on Wednesday.

GBP/USD technical analysis

GBP/USD trades sharply higher at around 1.3460 as of writing. The near-term bias has turned mildly bullish as it returns above the 20-period exponential moving average (EMA), which is at 1.3425.

The Relative Strength Index (RSI) at about 53 hovers just above the midline, hinting at steady, rather than aggressive, upside momentum while the pair consolidates within this supported backdrop.

On the topside, the primary hurdle is the May 26 high at around 1.3500, followed by the descending resistance trend line, with its break price near 1.3580. On the downside, initial demand would be seen around the 20-EMA at 1.3425, while the upward trend-line support around 1.3327 would remain a key support zone.

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Trade of The Day: USD/NOK

  • The USDNOK exchange rate ended yesterday’s session above the 100-day exponential moving average (EMA100; purple).
  • Brent crude oil futures (OIL) are losing ground for the second consecutive session, slipping below 90 USD per barrel—their lowest level since April 20, 2026.
  • CPI inflation in Norway fell to 3.1% in May from 3.4% in April.

Recommendation:

  • Position: Long (BUY) on USDNOK at market price
  • Target Price (Take Profit; TP): 9.6540 (TP1), 9.7840 (TP2)
  • Stop Loss (SL): 9.4000

Source: xStation5

Opinion

USDNOK is gaining momentum, increasingly solidifying a trend reversal on a pair whose volatility in recent months was primarily shaped by upward pressure on oil prices. Over the past two weeks, the price crossed three exponential moving averages (the 10-, 30-, and 100-day EMA; yellow, light purple, and dark purple, respectively) and successfully defended support where the EMA100 overlaps with the 50.0 Fibonacci retracement level of the latest downward wave. This technical bullish momentum is also well-supported by geopolitical and macroeconomic realities. Fluctuations in the Trump administration’s stance toward Iran did not trigger significant volatility (by recent months’ standards) in oil contracts, and the cancellation of an attack planned for yesterday contributed to a sharp drop in commodity prices.

This suggests that, for the market, the worst regarding the Strait of Hormuz is already behind us, thereby causing the risk premium for oil-producing countries’ currencies to fade out. Alongside the correlation between the Norwegian krone and oil, the latest inflation reading from Norway indicated a second consecutive drop in CPI, with economists forecasting a further decline in price pressure—particularly in the food sector, which is vital for households and their expectations. Meanwhile, in the US, hawkish expectations are mounting for the Fed (OIS curve imlies 73% chance for a hike bedore the end of 2026), benefiting the greenback. Therefore, the monetary policy trajectories of both economies consistently support a continuation of the upward move in USDNOK. A short-term risk remains the near-overbought condition of the pair. The RSI sits right below the 70-point threshold (currently at 66.4), which may discourage investors from pushing the exchange rate higher without a minor technical correction.

Methodology

The recommendation was prepared based on a technical analysis of the USDNOK chart and a fundamental analysis of the discussed economies (monetary policy in Norway and the US), as well as the exchange rate’s correlation with crude oil prices. The direction of the recommendation was determined using moving averages and market expectations regarding Fed policy. The Take Profit and Stop Loss levels were set using Fibonacci retracements and price action (TP1 and TP2 at the 78.6 and 100 Fibo levels of the last downward wave; SL at the 38.2 Fibo level).

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UK GDP Contracted and the Pound is Up?

pril 2026 as a result of the escalating conflict in the Middle East. According to the latest data from the Office for National Statistics (ONS), this marks the first monthly GDP decline since August 2025. Although this contraction aligns with forecasts from economists polled by Reuters, it represents a sharp trend reversal from March, which recorded a 0.3% growth. However, looking at the less volatile three-month perspective, real GDP grew by 0.7% in the period to April 2026, demonstrating that the British economy entered the current crisis on relatively stable foundations.

Chart 1: Real and nominal GDP in the United Kingdom (upper panel) and quarter-on-quarter change (lower panel). In Q1 2026 (January–March), the UK economy grew by 0.6%, offering a solid base by British standards before the effects of the Middle East war materialized. Source: XTB Research based on ONS/Bloomberg data.

How the Iran Conflict Stalled Growth in the United Kingdom

The main catalyst for April’s slowdown is the war between Iran and the US, which recently passed the 100-day mark. The effective blocking of the Strait of Hormuz—a crucial shipping route for oil and many other commodities—paralyzed global supply chains and triggered a sharp surge in energy and fuel prices. As a net energy importer, the UK is exceptionally vulnerable to international energy shocks. A sudden surge in prices at petrol stations forced motorists to drastically cut consumption in April, reversing the positive growth impulses seen at the beginning of the year. Furthermore, ONS surveys revealed widespread complaints from businesses regarding falling turnovers and rising production costs across the wholesale, manufacturing, and transport sectors.

Sector Breakdown: Slump in Services, Stagnation in New Construction

April’s economic slowdown was characterized by uneven performances across core industrial sectors:

  • Services Sector: Recorded a 0.2% decline, becoming the primary driver of the monthly GDP drop. The arts, entertainment, and recreation sector suffered the most, posting a drastic 9.1% fall. This was mainly due to the cancellation of multiple sporting events in the Middle East, which directly hit UK-based companies.
  • Construction: Ticked up marginally by 0.1%. However, this growth came solely from a 0.6% recovery in repair and maintenance. New construction projects fell by 0.3%, complicating the government’s political promises to accelerate housebuilding in the UK.
  • Industrial Production: Showed zero growth (0.0%). Although manufacturing grew by 0.4% (driven by a 4.2% surge in pharmaceutical production), these gains were completely offset by shrinking outputs in the utility sector.

Stagflation Risks and the Bank of England’s Dilemma

The sudden dip in GDP momentum has raised serious concerns about a dangerous descent towards stagflation—a situation where economic stagnation couples with stubborn inflation. The International Monetary Fund (IMF) has already downgraded its 2026 UK economic growth forecast from 1.3% to just 0.8%, warning that Britain could feel the impact of the war most acutely among major economies. Economic conditions could deteriorate further in the third quarter, when the domestic energy price cap is set to rise by 13%, allowing suppliers to pass higher oil and gas costs onto consumers. This leaves the Bank of England in a precarious position ahead of its upcoming interest rate decision. Policymakers must now balance combating war-driven inflation against the risk of triggering a deeper recession.

Following the ONS release, sterling initially lost 0.2% against the dollar as markets scaled back expectations for subsequent rate hikes. Over time, however, a global increase in risk appetite took over in response to easing tensions between the US and Iran, resulting in a weaker dollar. Moreover, the softer GDP does not eliminate the hawkish pressure on the Bank of England, which is widely expected to hold interest rates at 3.75%. Some members of the Monetary Policy Committee may vote for a hike, signaling the central bank’s readiness to combat the prolonged energy shock.

Chart 2: The Bank of England’s main interest rate and UK 2- and 10-year bond yields. Yields are already clearly above the 3.75% rate, signaling hawkish expectations from the debt market, which is organically tightening financial conditions. Source: XTB Research based on Bloomberg data.

Technical Analysis: GBPUSD (D1)

GBPUSD is currently trading slightly up (+0.05%), although the pair on the D1 interval remains in a local downtrend, consolidating around the 1.34158 level. The price is currently moving below key exponential moving averages: EMA 30 (1.34226) and EMA 100 (1.34372), which act as crucial resistance for any building momentum. Following a rebound from recent support near 1.3330, selling pressure has slowed down. The RSI (14) indicator at 49.5 signals complete market neutrality. The next direction depends on a sustained breakout above the moving averages or a return to test the recent lows.

Chart 3: GBPUSD and EURGBP (inverted; blue) exchange rates. Source: xStation5

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Germany’s final Harmonized Index of Consumer Prices for May remains at 2.7% YoY: What it means for EUR/USD?

Germany’s final Harmonized Index of Consumer Prices (HICP) data for May has arrived at 2.7% Year-on-Year (YoY), as the preliminary data showed. The inflation data cooled down from 2.9% in April. On a monthly basis, it is confirmed that the German HICP growth declined by 0.1%.

There is a slight recovery move in the EUR/USD data, following the German final HICP data release; however, it appears that the move has come due to a slight correction in the US Dollar (USD). Still, the major currency pair is down 0.15% to near 1.1560.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.10%0.06%0.19%0.06%0.20%0.29%0.13%
EUR-0.10%-0.05%0.09%-0.04%0.11%0.19%0.02%
GBP-0.06%0.05%0.15%0.01%0.12%0.23%0.08%
JPY-0.19%-0.09%-0.15%-0.15%-0.01%0.08%-0.08%
CAD-0.06%0.04%-0.01%0.15%0.14%0.22%0.07%
AUD-0.20%-0.11%-0.12%0.01%-0.14%0.07%-0.08%
NZD-0.29%-0.19%-0.23%-0.08%-0.22%-0.07%-0.14%
CHF-0.13%-0.02%-0.08%0.08%-0.07%0.08%0.14%

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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

What do Germany’s final HICP data mean for EUR/USD?

The impact of Germany’s final HICP data remains little on EUR/USD, unless there is a dramatic deviation. The major trigger for the major currency pair remains preliminary readings.

Meanwhile, the European Central Bank’s (ECB) monetary policy announcement on Thursday, in which it raised the Deposit Facility rate by 25 basis points (bps) to 2.25%, signaled that policymakers remained highly concerned about upside inflation risks due to elevated energy prices in the wake of Middle East conflicts.

ECB President Christine Lagarde said in the press conference, post the monetary policy announcement, “Short-term inflation expectations have risen,” and the central bank will “monitor size, persistence of energy price increase”.

Technical Analysis:

EUR/USD trades lower at around 1.1560, keeping a bearish bias as spot holds beneath the 20-period Exponential Moving Average (EMA) at 1.1603 and the broader downtrend resistance line near 1.1687. The pair is still riding an underlying ascending support structure from 1.1503, but the latest Relative Strength Index (14) reading around 42 suggests sellers retain the near-term initiative while any rebounds are likely to struggle against overhead supply.

On the topside, initial resistance is located at the 20-period EMA around 1.1603, with the descending trend-line resistance at 1.1687 acting as the next barrier if buyers manage a clearer bounce. On the downside, the first key support emerges at the rising trend-line break level near 1.1503; a daily close below this floor would expose it to the March 13 low at 1.1411.

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AUD/USD Price Forecast: Needs decisive break above 50% Fibo retracement at 0.7050 for more upside

  • AUD/USD falls to near 0.7035 as the US Dollar bounces back.
  • Traders doubt over US President Trump stating that the Iran deal has been approved by its top leadership.
  • The RBA is expected to leave its OCR steady at 4.35% on Tuesday.

The AUD/USD pair is down 0.22% to near 0.7035 in the early European trade on Friday. The Aussie pair faces selling pressure as the US Dollar (USD) rebounds, following Iran’s denial upon agreeing to the Memorandum of Understanding (MoU) with the United States (US), as reported by Iran’s Fars News agency, which President Donald Trump claimed to have been agreed by Tehran’s top leadership.

During press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.15% higher to near 99.85.

On Thursday, US President Trump said that planned attacks on Iran have been called off, and discussions and final points of the peace deal have been, in both concept and great detail, approved by all parties involved. However, he clarified that the US naval blockade on Iranian sea ports will remain intact until the deal is finalized.

Meanwhile, the Australian Dollar (AUD) trades with caution ahead of the Reserve Bank of Australia’s (RBA) monetary policy, which will be announced on Tuesday. According to the latest Reuters poll, the RBA will halt its monetary tightening cycle and leave its Official Cash Rate (OCR) unchanged at 4.35%. This year, the RBA has already raised its OCR by 75 basis points (bps).

AUD/USD technical analysis

AUD/USD trades lower at around 0.7035, maintaining a bearish near-term tone as spot holds beneath the 20-day exponential moving average (EMA) at 0.7103 and the 50% Fibonacci retracement at 0.7054.

The pair is hovering just above the 61.8% retracement at 0.7002, while the Relative Strength Index (14) around 39 hints at weak, but not extreme, downside momentum after the recent slide from the mid-0.72 area.

On the downside, initial support emerges at the 61.8% Fibonacci retracement at 0.7002, ahead of the 78.6% level at 0.6929 and the swing low anchor around the 100% retracement at 0.6834. On the topside, a recovery would first need to clear the 50% retracement at 0.7054, followed by a dense resistance zone formed by the 20-day EMA at 0.7103 and the 38.2% retracement at 0.7106, with further bullish scope only opening toward the 23.6% level at 0.7171 and the recent cycle high near 0.7274.

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GBP/USD Price Forecast: Eyes 1.3400 amid modest USD weakness; remains below weekly top

  • 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

Chart Analysis GBP/USD

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.

USDEURGBPJPYCADAUDNZDCHF
USD-0.13%-0.13%-0.03%-0.05%-0.08%-0.06%-0.21%
EUR0.13%-0.00%0.09%0.07%-0.06%0.09%-0.08%
GBP0.13%0.00%0.11%0.08%-0.04%0.10%-0.08%
JPY0.03%-0.09%-0.11%-0.02%-0.16%-0.02%-0.17%
CAD0.05%-0.07%-0.08%0.02%-0.13%0.02%-0.16%
AUD0.08%0.06%0.04%0.16%0.13%0.15%-0.05%
NZD0.06%-0.09%-0.10%0.02%-0.02%-0.15%-0.17%
CHF0.21%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).

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Indian Rupee slumps as oil price surges amid fears of US-Iran ceasefire collapse

  • The Indian Rupee faces intense selling pressure against the US Dollar due to a strong recovery in oil prices.
  • FIIs continue to squeeze their stake in the Indian stock market.
  • India’s CPI in May is seen higher at 4% YoY from 3.48% in April.

The Indian Rupee (INR) tumbles at open against the US Dollar (USD) on Thursday, with the USD/INR pair rising to near 95.65. The pair gains as a sharp recovery in oil prices due to fears surrounding the collapse of the ceasefire between the United States (US) and Iran has weakened the Indian Rupee.

In India’s morning session, the MCX Crude Oil contract expiring on June 18 is up 0.7% to near 8,787. The contract surged 3.6% on Wednesday even after recovering significant losses.

The appeal of currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, diminishes in a high oil price environment.

US launches strikes against Iran’s unwarranted aggression

On late Wednesday, the US Central Command (CENTCOM) confirmed that it launched additional “self-defense strikes” on multiple targets in Iran as retaliation against Tehran’s “unwarranted and continued aggression”. This came after the US CENTCOM launched a series of attacks on Iran’s air defense, ground control stations, and surveillance radar sites near the Strait of Hormuz on Tuesday in response to Iran shooting down the US Apache helicopter.

Additional military operations from Washington were already anticipated as US President Donald Trump said in an interview with Fox News that he is close to ordering new strikes against Iran for taking too long in finalizing a deal.

Before remarks pointing to ordering fresh strikes against Iran, US President Trump also said in a post on Truth Social that Iran has to pay the price for taking too much time in reaching a deal.

However, the ceasefire between the US and Iran announced in April appears not to have collapsed yet as US President Trump has told aides to deliver a message to Iran via Qatar that the attacks did not mean a “restart of all-out war,” and were only in response to the helicopter downing, The Wall Street Journal (WSJ) reported.

FIIs keep squeezing stake in Indian stock market

Overseas investors continue to pare their stake in the Indian stock market as higher oil prices keep weighing on India Inc.’s earnings projections. So far in June, Foreign Institutional Investors (FIIs) have remained net sellers on all trading days and have offloaded their stake worth Rs. 62,654.34 crore.

India’s CPI data awaited

On the domestic front, the major trigger for the Indian Rupee will be the Consumer Price Index (CPI) data for May, which will be published on Friday. Investors will closely monitor the data to get fresh cues regarding the Reserve Bank of India’s (RBI) monetary policy outlook.

In the policy meeting last week, the RBI kept the Repo Rate unchanged at 5.25%, as expected, and warned that the central bank would need to act “if inflation gets generalized”.

India’s CPI data is expected to arrive higher at 4% Year-on-Year from 3.48% in April.

Technical Analysis: USD/INR stays in Symmetrical Triangle formation

USD/INR trades higher at around 95.65 at press time. The near-term trend of the pair appears to be sideways in an overall bullish structure amid the Symmetrical Triangle formation. The pair remains close to the 20-day exponential moving average (EMA), which is at 95.4886, indicating a sideways trend.

The Relative Strength Index (RSI) at 53.79 is near neutral but slightly positive, hinting that upside pressure persists, even as the pair consolidates beneath the descending resistance trend structure derived from prior highs.

On the topside, initial resistance is seen at the bearish trend-line break area near 96.03, where a clear daily close above would open the way for a more sustained recovery towards the all-time high at 97.08. On the downside, immediate support sits at the 20-day EMA at 95.49, with the next, more structural, floor at the rising trend-line region around 94.77; a break below this latter level would weaken the current constructive tone and expose deeper retracements.

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United States Dollar Index (DXY) Price Forecast: Bulls have the upper hand above 99.50

  • DXY struggles to capitalize on the overnight bounce from the vicinity of the weekly low.
  • Fed rate hike bets and rising US-Iran tensions limit the downside for the safe-haven USD.
  • The bullish technical setup backs the case for the emergence of dip-buyers at lower levels.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, edges lower during the Asian session on Thursday, stalling the overnight bounce from the vicinity of the weekly low. The index, however, remains confined within the weekly range and currently trades near the 100.00 psychological mark, just below its highest level since April 6, set on Monday.

A softer Core US Consumer Price Index (CPI) eased concerns about a runaway inflation spiral, which, in turn, is seen as a key factor undermining demand for the US Dollar (USD). However, a rise in the headline CPI to a three-year high keeps the door open for an interest rate hike by the US Federal Reserve (Fed) in 2026. This, along with renewed hostilities between the US and Iran, continues to act as a tailwind for the safe-haven buck and helps limit further losses.

From a technical perspective, the range bound price action witnessed since the beginning of this week might still be categorized as a bullish consolidation phase against the backdrop of the recent breakout through the 99.50 horizontal barrier. Moreover, the Index is holding well above the 200-period Exponential Moving Average (EMA) at 99.01, which now underpins the broader upturn and backs the case for an extension of a one-month-old uptrend.

Meanwhile, the Relative Strength Index (RSI) at 62.29 stays in positive territory without yet signalling overbought conditions. Adding to this, the Moving Average Convergence Divergence (MACD) indicator remains above the zero line with a mildly positive reading near 0.08, hinting that upside momentum is still constructive but not aggressive. Hence, acceptance above the 100.00 mark is needed to back the case for a further near-term appreciation.

On the downside, immediate support is located near the 99.50 resistance breakpoint, with the 200-period EMA at 99.01 reinforcing a deeper structural floor on pullbacks. As long as the DXY defends this moving average, dips are likely to be treated as corrective rather than the start of a sustained reversal.

(The technical analysis of this story was written with the help of an AI tool.)

DXY daily chart

Chart Analysis Dollar Index Spot

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 New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.11%-0.11%-0.03%-0.04%-0.03%-0.03%-0.19%
EUR0.11%0.00%0.07%0.07%-0.02%0.11%-0.07%
GBP0.11%-0.00%0.06%0.07%-0.01%0.10%-0.08%
JPY0.03%-0.07%-0.06%-0.02%-0.11%0.00%-0.15%
CAD0.04%-0.07%-0.07%0.02%-0.09%0.04%-0.15%
AUD0.03%0.02%0.01%0.11%0.09%0.12%-0.07%
NZD0.03%-0.11%-0.10%-0.00%-0.04%-0.12%-0.18%
CHF0.19%0.07%0.08%0.15%0.15%0.07%0.18%

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).