The pound climbs to new highs as the US dollar continues to lose strength.

GBP/USD rose to 1.3599 on Thursday, with the pound briefly touching its strongest levels since mid-February. Sterling’s advance was supported by ongoing US dollar weakness, as demand for the greenback’s safe-haven status eased amid increasing optimism over a potential US–Iran agreement.

Axios reported that the White House is nearing a framework memorandum with Iran, which could open the door to ending the conflict and beginning nuclear negotiations. Tehran is expected to respond within 48 hours, though a final deal has not yet been reached.

Meanwhile, investors are watching UK local elections closely, with polling indicating potential setbacks for Keir Starmer’s party.

On the monetary policy side, expectations for the Bank of England have been adjusted, with markets now pricing in around 50 basis points of tightening by year-end—roughly two rate hikes—down from earlier expectations of up to three increases.

Market technical review

On the H4 timeframe, GBP/USD is moving within a wide consolidation band above 1.3515, with price action currently stretching toward 1.3650. A pullback toward 1.3344 is still on the table before any further range-bound movement resumes. A decisive break to the upside would expose the 1.3650 area again, while a break lower could accelerate declines toward 1.3344. The MACD also aligns with this outlook, as the signal line remains above the zero line but is turning downward, suggesting weakening bullish momentum.

On the H1 timeframe, GBP/USD is consolidating in a tight range around 1.3615. Price has recently extended lower toward 1.3578 and is now attempting a recovery back to 1.3615 for a potential retest from below. This rebound may be short-lived, with a further decline toward 1.3565 still likely. The Stochastic oscillator supports this bearish short-term bias, with the signal line below 50 and trending down toward 20, indicating rising downside pressure.

Conclusion

The pound continues to find support from improved global risk sentiment and weaker demand for the US dollar as a safe-haven asset. However, ongoing political uncertainty in the UK, along with evolving expectations for Bank of England policy, may cap further gains. In the near term, GBP/USD is expected to remain highly reactive to geopolitical developments and shifts in broader market sentiment.