• Trump’s ceasefire push improves sentiment despite Iran-Israel attacks.
• Strong NFP keeps Fed hike odds elevated before CPI.
• BoE tightening bets limit Sterling downside amid quiet UK docket.

The Pound Sterling registers modest gains of 0.10% on Monday as risk appetite improved despite attacks exchanged between Iran and Israel, which agreed to halt fire as US President Donald Trump demanded the end of shooting, to resume talks between Washington and Tehran.

Sterling steadies as softer Dollar offsets Fed hike repricing

The GBP/USD trades at 1.3349 after bouncing off daily lows of 1.3305, as the Greenback reversed some of its Friday’s gains, with the US Dollar Index (DXY) down 0.16% at 99.91.

Oil prices trimmed some of their earlier gains after Iran’s army announced that its attack on Israel was over, though it warned that further strikes on Lebanon would open the door for retaliation.

Last Friday, a strong Nonfarm Payrolls report in the US revealed that the labour market is solid. This justifies hawkish remarks by some Federal Reserve officials, such as Cleveland Fed President Beth Hammack—a voter in 2026—who favours tightening policy if inflation continues to edge higher.

On Wednesday, traders and Fed policymakers will get an update on inflation figures, as the Consumer Price Index (CPI) in May is expected to breach the 4.2% threshold, up from April’s 3.8%. Investors increased the chances that the Federal Reserve will raise interest rates in 2026, with odds at 92% for a 25-basis-point rate hike towards the end of the year.

In the UK, the docket was absent, but speculation that the Bank of England (BoE) will tighten monetary policy by at least 50 bps in 2026, capped Sterling’s decline.

Ahead on Tuesday, the UK economic schedule is absent. In the US, traders will eye the ADP Employment Change 4-week average and housing data.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3340, keeping a bearish near-term bias as spot holds beneath the grouped simple moving averages around 1.3456, which now act as overhead resistance. The pair also remains positioned well below the broader downward resistance trend line drawn from 1.3869, reinforcing a capping structure, while the Relative Strength Index (14) at roughly 39 leans toward the weaker side of neutral, suggesting sellers still retain control despite the approach to mildly oversold territory.

On the topside, initial resistance aligns with the cluster of simple moving averages near 1.3456, and further upside would face a more distant barrier at the descending trend line traced from 1.3869. On the downside, the main technical floor emerges from the upward support trend line originating around 1.3159, where a sustained break would likely open a deeper corrective leg in the broader bearish sequence.

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