The British Pound witnessed selling pressure during the early Asian session, retreating toward the 1.3550 region. Rising geopolitical tensions in the Middle East and hawkish commentary from the US central bank have driven safe-haven flows toward the Greenback, weighing heavily on the major currency pair.
Market participants are closely monitoring developments after US President Donald Trump warned of a forceful response following an exchange of fire between US and Iranian forces. Meanwhile, Iran's Revolutionary Guard Corps (IRGC) stated it targeted US military bases in response to recent strikes. Compounding the regional instability, the United Kingdom Maritime Trade Operations reported that a tanker was struck by three projectiles while exiting the Strait of Hormuz.
Adding to currency market pressures, Federal Reserve leadership recently emphasized that inflation is not slowing down rapidly enough, signaling that additional policy tightening may be required. This commentary has prompted traders to scale up expectations for a potential September rate hike.
Traders are now bracing for key economic releases, including the ISM Manufacturing Purchasing Managers Index report and upcoming employment figures. A weaker-than-expected labor report could potentially drag the US Dollar lower in the near term.
On the daily chart, GBP/USD trades near 1.3546, maintaining a mild bullish bias while holding above the 100-day simple moving average at 1.3444 and the lower Bollinger Band at 1.3433. The spot price is currently pressing against the middle Bollinger band at 1.3550, serving as an immediate resistance hurdle, while the Relative Strength Index sits at 53.3, pointing toward steady upside momentum.
Initial resistance on the topside stands near the 20-period SMA at 1.3550, followed by the upper Bollinger Band around 1.3668. On the downside, immediate support emerges at the 100-day SMA at 1.3444, with further cushioned support expected near the lower Bollinger Band at 1.3433.
Concurrently, other markets have experienced notable volatility. The EUR/USD pair managed to climb past the 1.1600 threshold, reversing some of its previous losses amid softer US Dollar momentum. Gold prices attempted to build on overnight bounces from sub-$4,400 levels, while West Texas Intermediate crude oil prices hovered around $85.60 per barrel as supply disruption fears persisted.
