GBP/USD edged slightly lower to around 1.3550 on Thursday, lower around 0.3% after the pair touched a session high near 1.3645 before turning back down. Price has been holding a roughly 100-pip range below the multi-month peak just under 1.3660, with a series of overlapping candles after the strong rally off May 1 swing lows close to 1.3450.
For the US Dollar (USD), the overarching driver remains the US-Iran ceasefire narrative and the Strait of Hormuz situation. Wednesday's slide for the Greenback came as the White House signaled it was close to a memorandum of understanding with Tehran, alongside President Trump's pause on the US-led effort to assist stranded vessels exiting the strait while fresh talks proceed. That backdrop pulled the Dollar Index down toward 97.60, a three-month low, before Thursday's modest rebound as some of the optimism trade unwound. A heavy slate of Federal Reserve (Fed) speakers including Collins, Hammack, Daly and Williams kept rate expectations in flux ahead of Friday's US Nonfarm Payrolls (NFP) print, where consensus stands close to 62K against a prior 178K.
On the Pound Sterling (GBP) side, the calendar this week is unusually thin, with no first-tier UK data releases scheduled. That leaves Sterling almost entirely a function of broad USD direction, with the Iran narrative and Friday's NFP print expected to dictate near-term moves. UK yields have continued to firm against the backdrop of sticky inflation expectations, but the absence of fresh domestic catalysts means the pair will likely take its cue from the Greenback through the end of the week.
GBP/USD 4-hour chart
Technical Analysis
In the four-hour chart, GBP/USD trades at 1.3550. The pair holds comfortably above the 200-period exponential moving average (EMA) at 1.3488, keeping the near-term bias constructive despite the recent pullback from this week’s highs. The location of price over the long-term EMA suggests underlying demand remains in place, while the Stochastic RSI around the mid-50s hints at neutral-to-moderate bullish momentum rather than an overextended market.
On the downside, initial support is seen at the 1.3500–1.3488 area, where the psychological handle converges with the 200-period EMA and should act as a key floor on further weakness. As long as GBP/USD holds above this zone on a closing basis, dips are likely to remain shallow and the broader recovery structure intact, with buyers expected to re-emerge on tests of that moving average.
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