• Burnham vows to keep Reeves’ fiscal rules, soothing Gilt fears.
• WTI jumps above $100 after Iran oil waiver reports fade.
• BoE hike bets build as Greene warns on inflation shock.

The British Pound extended its gains on Monday as political pressure over Prime Minister (PM) Keir Starmer increased. At the same time, Andy Burnham—the challenger to succeed Starmer—ruled out changing Chancellor Reeves’ fiscal rules if he becomes PM. The GBP/USD trades at 1.3414 after testing multi-week lows of 1.3302.

GBP/USD rises as fiscal-rule pledge offsets UK political turmoil

Market mood is mixed as depicted by US equities fluctuating between gainers and losers. The US Dollar trimmed some of its earlier losses after a senior US official denied Iran’s media reports that the US had proposed a temporary waiver on Iran’s Oil Exports. Consequently, WTI turned positive in the day, up by 3.21% with the barrel back above the $100.00 milestone.

Geopolitics continued to grab the headlines. The US President Donald Trump posted in this Truth Social account that he would refrain from attacking Iran on Tuesday, to allow a resumption of negotiations to deliver a deal.

In the UK, pressure on Starmer to resign increases following a dismal local election result for the Labour Party. Comments from Andy Burnham’s team are aimed at calming markets, which pushed UK Gilts higher, as Burnham is seen as someone who favors greater state involvement in key industries, workers' protection and further spending.

Money markets had priced in that the Bank of England would raise rates at least twice this year, according to Price Terminal data.

Bank of England policymaker Megan Greene was hawkish, saying that the BoE should not assume that Iran’s war-induced inflationary shock will be temporary and that officials should be proactive rather than wait for evidence of higher prices.

The US economic docket will feature the release of the minutes of the Federal Reserve’s last monetary policy meeting, along with speeches by Fed officials and the swearing-in of Kevin Warsh as the new Fed Chair on May 22. In the UK, the schedule will feature jobs data, and speeches by members of the BoE.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3434. The pair is hovering marginally above a tight cluster of the 50-day, 100-day and 200-day simple moving averages around 1.3430, which collectively offer nearby dynamic support but do not yet imply a clear bullish trend while price remains capped well beneath the downward resistance trend line derived from previous highs and referenced by the break area near 1.3608. The Relative Strength Index (14) at about 46 sits just below the neutral 50 line, hinting at a lack of strong directional momentum and leaving the broader bias neutral with a slight downside risk if the moving-average floor gives way.

On the topside, initial resistance is seen at the descending trend-line barrier around 1.3608; a daily close above this zone would be needed to ease the broader cap and open room for a more convincing recovery. On the downside, immediate support is provided by the compressed 50-day, 100-day and 200-day SMA cluster near 1.3430, and a break back below this area on a closing basis would expose the pair to renewed selling pressure and a possible return toward recent lows.

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