• Sterling climbs as renewed US-Iran talks lift overall market sentiment.
• Softer US producer inflation data drags the Dollar to six-week lows.
• Traders now await UK GDP, US jobless claims and central bank speakers.

The Pound Sterling advances as traders remain optimistic about a possible resolution to the US-Iran conflict. At the same time, the US Dollar weakens amid a hot US inflation report that missed forecasts for a higher print. The GBP/USD trades near 1.3590, gaining 0.61%.

Sterling gains on Iran deal hopes as cooling prices hurt the USD

On Tuesday, geopolitics continued to drive price action. Several news agencies reported that the US and Iran are preparing to resume talks, according to TASS and NBC, which said it could happen as early as this week. Meanwhile, a US senior official said that “a lot is happening today and tomorrow the US and Iran have all of the ingredients for a deal, but it’s not all there yet,” according to Fox News.

This weighed on the Greenback’s safe-haven appeal, as shown by the US Dollar Index (DXY). The DXY, which measures the buck’s performance against a basket of six currencies, is down 0.34% at 98.03, at near six-week lows.

Worth noting that the positive correlation between WTI and the Greenback is undermining the latter. Further negotiations in the Middle East are pushing WTI lower, with the contract down 4.50% on the day at $93.50 per barrel.

In the meantime, the US Producer Price Index (PPI) in March missed estimates, rising 4% instead of the 4.6% expected, while excluding volatile items, the core PPI expanded at a 3.6% YoY pace, up from 3.5%.

Earlier, the ADP Employment Change 4-week average rose by 39.25K, up from 26K in the previous week, highlighting a resilient labor market.

According to Nick Rees, head of macro research at Monex Europe, the GBP/USD is expected to underperform as traders return to domestic political issues in the UK.

“We do have those local elections coming up at the beginning of May, and we don’t think markets or indeed a lot of politicians have grasped quite how bad these could be for the Labor Party,” Rees said.

Ahead, traders will eye speeches by central bankers, from the Bank of England and from the Federal Reserve. Economic data releases are expected through Thursday, led by UK GDP. In the US, traders will eye jobless claims data.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3572. The pair holds above the cluster of the 50-, 100- and 200-day simple moving averages (SMAs) around 1.3429, which reinforces a constructive near-term bias as buyers defend the recent rebound. Price remains within the broader contracting structure defined by the rising support and descending resistance trend lines, while the latest advance away from the SMA floor suggests dip-buying interest is still present despite prior caps under the downtrend line.

On the topside, initial resistance is seen near the former support trend-line break around 1.3812, followed by the descending resistance line originating at 1.3869. On the downside, immediate support is located at the 1.3572 area, with the SMA cluster around 1.3429 providing a more important demand zone; a daily close back below that region would weaken the bullish tone and expose a deeper correction within the broader range.

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