On Monday, during late European trading, the British pound (GBP) held steady against the US dollar (USD) around the 1.3500 level. This rise in GBP/USD appears linked to a risk-on sentiment in the market, fueled by hopes that a deal between the US and Iran might be reached soon.
As of now, S&P 500 futures were showing an increase of nearly 1% at about 7,550, indicating robust demand for riskier assets. In contrast, the US Dollar Index (DXY), which measures the dollar against six other major currencies, dipped by 0.33%, hovering around 99.00.
Investor optimism remains high, particularly after US President Donald Trump mentioned over the weekend that a deal with Iran is “almost done.” However, responses from Iran seem to diverge from Trump’s assurances, adding a layer of uncertainty.
Specifically, Iran’s Foreign Ministry spokesperson noted during European trading that while some conclusions have been reached on various topics, this does not imply that an agreement is imminent.
GBP/USD Technical Analysis
Currently, GBP/USD is bouncing around the 1.3500 mark. It seems to be on a slightly bullish trajectory now that it has climbed above the 20-day exponential moving average (EMA) of 1.3474. This short-term EMA rebound suggests a potential stabilization of the recent rally, with the Relative Strength Index (RSI) close to 52, indicating a neutral to positive outlook rather than an extreme scenario.
Looking upward, immediate resistance is marked at the previous downside break level near 1.3612. If the pair can push through this barrier, it might pave the way for further gains towards 1.3700. On the flip side, if the support provided by the 20-day EMA falters, the pair could tumble to 1.3400. Breaching that level might lead to an even steeper drop towards the May 18 low of 1.3302.
