GBP/USD edges up after four consecutive days of declines, trading near 1.3270 during Monday’s Asian session. However, the daily chart still points to a sustained bearish outlook, with the pair continuing to move within a descending channel pattern.
GBP/USD Market Technical Outlook
On the daily timeframe, GBP/USD retains a mildly bearish bias as price remains below a flattening 100-day exponential moving average and trades under the Bollinger Band midpoint, keeping action confined to the lower half of the volatility range. The RSI near 45 suggests fading bullish momentum rather than strong selling pressure, indicating sellers still have a slight advantage while pullbacks remain orderly.
Key support is seen around the recent low at 1.3230, which previously aligned with the lower Bollinger Band; a break below this level would likely expose further downside toward 1.3160. On the upside, resistance is located at 1.3430, where the 100-day EMA and Bollinger midline converge, and a sustained daily close above this zone would be needed to ease bearish pressure and shift focus toward 1.3560.
Fundamental Analysis
A mixed fundamental backdrop calls for caution before taking strong directional positions.
Market reports indicate ongoing diplomatic efforts to establish a one-month ceasefire framework aimed at enabling US–Iran negotiations on ending the conflict. This follows President Donald Trump’s decision to postpone planned strikes on Iran’s energy infrastructure by five days, raising hopes for potential de-escalation in the Middle East. However, tensions remain elevated as hostilities continue, with Israel maintaining strikes on Iran and the US deploying additional forces, including elements of the 82nd Airborne Division, to the region.
At the same time, Iran has launched fresh missile attacks on Israel, while Gulf states report ongoing interceptions of drones and missiles amid escalating fighting across Lebanon and Iraq. These developments keep geopolitical risk elevated and support crude oil prices, adding to inflation concerns and reinforcing expectations that the US Federal Reserve may remain hawkish. Markets have largely priced out further Fed rate cuts and are increasingly factoring in the possibility of a rate hike later this year, which supports the US dollar and limits upside potential for GBP/USD.
On the UK side, data from the Office for National Statistics (ONS) showed headline CPI holding at 3.0% year-on-year in February, in line with expectations. However, core inflation surprised to the upside, rising to 3.2% from 3.1% previously. Combined with a hawkish Bank of England (BoE) outlook—hinting at possible rate hikes as early as April—this provides some underlying support for the British pound and helps cushion downside pressure on GBP/USD.
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