FX.co ★ PipsHunter99 | GBP/USD

Technical and Fundamental Analysis of the GBP/USD Pair The British pound continued to strengthen against the U.S. dollar on Thursday, with GBP/USD advancing toward the 1.3620 region. The move higher came as the U.S. dollar weakened broadly amid improving market sentiment tied to expectations of a potential diplomatic breakthrough between the United States and Iran. The U.S. Dollar Index USDX, which tracks the performance of the greenback against a basket of major currencies, drifted lower toward the 97.90 level as investors reduced demand for traditional safe-haven assets. Global risk appetite improved after regional reports indicated that discussions between Washington and Tehran were intensifying. Market optimism was fueled by speculation that progress toward easing tensions in the Middle East could eventually lead to the partial reopening of the Strait of Hormuz, a strategically important route responsible for a substantial portion of global oil transportation. The prospect of reduced geopolitical instability encouraged investors to increase exposure to risk-sensitive markets while trimming defensive dollar positions. Sterling benefited from the broader shift in sentiment as investors rotated into higher-yielding currencies and growth-linked assets. Equity markets also reflected the positive tone, with S&P 500 futures moving higher as confidence improved across global financial markets. Reduced fears surrounding energy supply disruptions and inflationary shocks further weakened support for the U.S. dollar, allowing GBP/USD to maintain its upward trajectory during the session. Attention is now turning toward Friday’s U.S. Nonfarm Payrolls (NFP) report, which remains the week’s key macroeconomic event for currency traders. The employment figures are expected to heavily influence expectations regarding future Federal Reserve monetary policy. Investors are closely monitoring labor market conditions to determine whether the U.S. economy remains resilient enough to justify maintaining elevated interest rates for an extended period. Current pricing from the CME FedWatch Tool suggests markets continue to expect the Federal Reserve to leave interest rates unchanged through the remainder of the year. Technically, GBP/USD maintains a positive structure on both the H4 and H1 timeframes, with price trading near the top of its recent consolidation range around 1.3620. On the H4 chart, the pair recently cleared a major resistance zone between 1.3570 and 1.3600, signaling that bullish momentum has strengthened after buyers absorbed persistent selling pressure. The broader structure remains supportive following the formation of higher lows above the key demand area near 1.3500–1.3530. The 20-period Simple Moving Average (SMA) on the H4 timeframe continues to trend upward beneath current price action, acting as dynamic support for the ongoing recovery. Meanwhile, the 50-period SMA remains positioned lower and supports the broader bullish market structure. However, as long as the price remains above both moving averages, the outlook favors continued upside potential. A sustained breakout above the 1.3620–1.3650 resistance region could open the door for an advance toward the next major supply zone near 1.3720–1.3740. On the H1 timeframe, shorter-term momentum also continues to lean bullish. Buyers have consistently defended pullbacks toward the 20-period SMA, currently located around the 1.3590–1.3600 region, reinforcing it as immediate support. The 50-period SMA on H1 remains slightly below the market price and continues to support the near-term upward structure. Demand remains concentrated between 1.3580 and 1.3595, where repeated rebounds have prevented deeper corrective moves. Immediate resistance is seen around the 1.3630–1.3650 zone. A confirmed move above this barrier would likely strengthen bullish momentum and expose the 1.3720 level. However, if the pair falls below 1.3580 support, sellers may attempt to push the price back toward the stronger H4 support region around 1.3530–1.3550. The Relative Strength Index (RSI) on the H4 timeframe remains below the 70 level, indicating that bullish momentum is still controlled and the market has not yet entered overbought territory. This suggests there is still room for further upside movement before exhaustion signals begin to appear. As long as the RSI continues to hold above the neutral 50 zone while staying below 70, the prevailing momentum structure favors buyers and supports the possibility of continued trend strength.