The GBP/USD pair is showing a moderate recovery after a slight decline the previous day. Market activity remains limited due to Good Friday, which is restraining short-term price fluctuations.
The British pound is receiving limited support, as market participants continue to expect two interest rate hikes by the Bank of England in 2026 amid rising energy prices and increasing inflation risks. However, Bank of England Governor Andrew Bailey previously noted that such forecasts may be overly optimistic, which has reduced investor confidence in aggressive monetary policy tightening.
Meanwhile, the upward potential of the GBP/USD pair remains limited, as the U.S. dollar is strengthening due to increased demand for safe-haven assets following recent statements by U.S. President Donald Trump regarding Iran.
Trump warned of the likelihood of military action in the coming two to three weeks and issued strong threats, without specifying what measures would be taken to restore shipping through the Strait of Hormuz. In response, Iran's Foreign Minister Abbas Araghchi stated that recent U.S. strikes on civilian infrastructure would not force Tehran to retreat, describing them as a sign of the opponent's moral and political crisis.
Additional pressure on the market comes from comments by Chicago Fed President Austan Goolsbee, who expressed concern about rising oil prices. He noted that persistently high energy prices could complicate the fight against inflation, especially if gasoline prices accelerate, which could further boost inflation expectations.
From a technical perspective, the pair is trading below key moving averages, and oscillators are negative. Therefore, any near-term recovery in the pair is likely to be viewed as a selling opportunity.