GBP/USD snaps five-day slide on Iran peace hopes ahead of key US data
- Markets rallied on reports Trump signaled willingness to halt Iran hostilities, though Iran's core demands remain unchanged.
- Wednesday's ADP, retail sales, and ISM PMI will dominate direction, with Friday's NFP landing on a Good Friday holiday.
- GBP/USD rose 0.32% on Tuesday in choppy trading, snapping a five-session losing streak as US Dollar selling pressure ran out of steam.
- No meaningful UK data is due this week, leaving Wednesday's packed US calendar as the key directional catalyst.
GBP/USD edged 0.32% higher on Tuesday in choppy trading, closing around 1.3230 after swinging between a session low near 1.3160 and a high close to 1.3260. The gain snapped a five-day losing streak, though the bounce lacked conviction and left price well below its key moving averages overhead. Tuesday's candle printed a long lower wick, suggesting dip-buying interest is emerging near the bottom of the pair's recent range, but the broader pullback from the January highs about 1.3870 to the recent low around 1.3010 still dominates the picture.
The bounce was driven by a wave of risk appetite after multiple reports suggested the US-Iran conflict may be approaching a resolution. The Wall Street Journal reported that President Donald Trump told aides he was willing to end military hostilities even if the Strait of Hormuz remained largely shut, while the New York Post later reported he believes the war will likely end soon, with other nations taking the lead in reopening the Strait. Markets also seized on comments from the Iranian President, who stated in a call with European officials that Iran was open to peace; however, his remarks were taken largely out of context, given his limited control over Iranian military operations and the fact that Iran's five-point demand list has not materially shifted.
With no meaningful UK economic data due this week, US releases will set the tone. The Bank of England (BoE) voted unanimously to hold Bank Rate at 3.75% in March, with even former doves joining the hold as the Middle East energy shock clouds the inflation outlook, and the next decision is not until April 30. On the US side, the Federal Reserve held the federal funds rate at 3.50% to 3.75% in March, and Wednesday brings a heavy data slate with the ADP Employment Change (40K consensus), February retail sales (0.5% MoM consensus), and the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) (52.5 consensus) all due. Friday's Non-Farm Payrolls (NFP) report (60K consensus) is the week's marquee release, but with both the US and UK observing Good Friday, thin holiday liquidity will likely mute any immediate reaction.
GBP/USD 5-minute chart
Technical Analysis
In the 5-minute chart, GBP/USD trades at 1.3228. The near-term bias is mildly bullish as price holds above the gently rising 200-period exponential moving average around 1.3221, keeping the intraday structure supported despite the latest loss of momentum. Stochastic RSI has retreated from overbought extremes near 90 to mid-range readings near 45, indicating that earlier upside pressure is easing but not yet reversing into outright bearish momentum, which keeps the path of least resistance tilted slightly higher while the pair consolidates above its key average.
Immediate support emerges at 1.3220, aligned with the 200-period exponential moving average, with a break exposing the next downside level at 1.3215. Below that, deeper support is located near 1.3205, where buyers would need to step in to protect the broader intraday up-bias. On the topside, initial resistance is seen at 1.3235, with a sustained move above opening the way toward 1.3245. A clearance of that barrier would reinforce the bullish tone and allow a further extension toward 1.3260.
In the daily chart, GBP/USD trades at 1.3229. The near-term bias is mildly bearish as spot has slipped below the 50-day exponential moving average around 1.34 and is testing distance beneath the flatter 200-day EMA near 1.34, signalling pressure against the broader range floor. Momentum has rolled over from overbought territory, with the Stochastic RSI retreating from above 80 toward the 70 area, indicating fading upside impulse after the recent bounce and leaving room for further downside correction if sellers press the break.
Initial support emerges around 1.3185, guarding the late-month lows, with a clear break exposing the next downside level near 1.3130 where previous consolidation may attract dip-buying. Below that, focus would turn toward 1.3050 as a deeper bearish objective. On the topside, immediate resistance stands at the 1.3330 zone, with recovery above there needed to ease current pressure and challenge the 200-day EMA cluster near 1.3380. A daily close above 1.3380 would neutralize the bearish tone and open the way toward 1.3450 as the next resistance hurdle.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
