• GBP/USD capped as disappointing US-Iran talks kept markets cautious.
• BoE tightening bets helped Sterling offset modest US Dollar strength.
• Traders now await US PPI, Fed speeches and labor data.

The Pound Sterling remains firm on Monday as talks between Iran and the US disappointed investors, triggering a reaction from the White House, while recent news suggested that Tehran could be considering abandoning uranium enrichment, a key condition set by the US to end the war. At the time of writing, the GBP/USD trade at 1.3457.

Sterling stays firm as BoE bets offset stronger Dollar tone

The market sentiment improved slightly but remains mixed, as Iran is considering halting its nuclear program. Nevertheless, the US established a blockade in the Strait of Hormuz, which began at 10:00 AM EDT on April 13, aimed at blocking Iranian-flagged vessels and those from other countries leaving Iranian ports.

The Wall Street Journal confirmed that the US blockade started as there are more than 15 US warships in place to support the operation, citing a senior US official.

The US Dollar Index (DXY), which tracks the performance of six currencies versus the Greenback, is up 0.10% at 98.79, a headwind for the GBP/USD.

Data from the US showed that Existing Home Sales fell to a nine-month low in March, from 4.09 million to 3.98 million, down 3.6% from February's print, as reported by the National Association of Realtors.

In the meantime, energy prices edged higher after breaking news that neither Washington nor Tehran reached an agreement over the weekend.

In the UK, fears of an inflation spiral triggered by high petrol prices pushed traders to price in nearly 50 basis points of rate hikes by the Bank of England (BoE) in 2026. This despite comments by BoE's Governor Andrew Bailey, who said that money markets are getting ahead of themselves, by expecting a hawkish BoE.

Given the Fed's backdrop and expectations of keeping borrowing costs unchanged in 2026, while the BoE is expected to tighten, further upside for GBP/USD is seen. However, a risk-off mood could keep bulls on the sidelines, awaiting confirmation before opening fresh bets for higher prices.

On Tuesday, the UK's docket is absent, while in the US, traders will eye the ADP Employment Change 4-week average, along with speeches by Fed officials and the Producer Price Index (PPI) for March, expected to rise by 4.6% YoY.

GBP/USD Price Forecast: Technical Outlook

In the daily chart, GBP/USD trades at 1.3459, holding a mildly bullish near-term bias as spot remains above the dense cluster of the 50-, 100- and 200-day simple moving averages around 1.3431. The pair has also pushed through the descending resistance trend line, now turned support near 1.3436, while the FXS Fed Sentiment Index grinds higher, which together suggests dip demand is emerging on shallow pullbacks.

On the topside, initial resistance is seen at the rising former support trend line projected near 1.3492, where sellers could attempt to cap the recovery. On the downside, immediate support is located at the prior descending trend barrier around 1.3436, followed by the major moving-average cluster near 1.3431, with a break under this zone needed to undermine the nascent bullish structure on the daily chart.

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