The GBP/USD pair is trading near the 1.3310 price region, trimming almost all its losses from Friday and breaking its four-day losing streak, as investors seem to have digested the United States/Israeli escalation in the war against Iran over the weekend.
On Saturday, the US launched a massive strike on Iran’s Kharg Island. Although US President Donald Trump called for an alliance to protect and reopen the Strait of Hormuz, most nations refused to send ships to the region and instead pushed for diplomatic solutions.
The Bank of England (BoE) is expected to keep rates on hold this Thursday, following the Federal Reserve (Fed) issuing its own interest rate decision on Wednesday. Markets expect the Fed to keep the rates unchanged at 3.50%-3.75%. The Fed will also publish a fresh Summary of Economic Projections (SEP) or dot plot, most likely impacted by war developments and higher oil prices.
Short-term technical analysis
In the 4-hour chart, GBP/USD trades at 1.3316. The near-term bias is bearish as the pair holds below the 20-period Simple Moving Average (SMA) around 1.3325, while it remains below the gently declining 100-period SMA near 1.3411. The Relative Strength Index (RSI) indicator has recovered toward 48, stepping away from oversold territory and hinting at easing bearish pressure rather than aggressive buying interest.
Immediate resistance emerges at 1.3317, where a horizontal cap aligns close to the current price, and a clear break above this area would open the door toward the 1.3410–1.3420 band defined by the 100-period SMA. On the downside, initial support stands at 1.3284, with a drop through this level exposing the recent floor at 1.3230 that guards against a deeper pullback toward the lower part of the recent range. As long as the pair defends 1.3284, the recovery bias toward the 100-period SMA remains in play.
(The technical analysis of this story was written with the help of an AI tool.)
