The GBP/USD currency pair maintained modest intraday gains for the second consecutive day, trading just above the mid-1.3400s and up less than 0.10% during the first half of the European session on Wednesday [1]. The pair's positive momentum was supported by optimism over a potential diplomatic resolution to the five-month-old war in the Middle East and the reopening of the Strait of Hormuz, which led to a four-week low in crude oil prices and eased inflation concerns [1]. This development prompted traders to reduce expectations for an imminent Federal Reserve rate hike, thereby weakening the safe-haven US Dollar and providing a tailwind for GBP/USD [1].
Despite the constructive tone, investors remained cautious, refraining from aggressive directional bets as they awaited further developments in the US-Iran conflict and the upcoming US Nonfarm Payrolls (NFP) report on Friday, which is expected to offer more clarity on the Fed's policy path and influence near-term USD dynamics [1].
From a technical standpoint, GBP/USD retains a bullish bias as long as it trades above the 200-hour Simple Moving Average (SMA), with momentum indicators such as the Relative Strength Index (RSI) near 55 and the Moving Average Convergence Divergence (MACD) marginally positive near the zero line, suggesting steady bullish pressure [1]. Any corrective pullback is likely to attract buyers near the 1.3400 level, with pivotal support at 1.3379, while resistance is seen at the weekly top around the 1.3500 psychological mark if the advance continues [1].
CONCLUSION
GBP/USD remains supported above 1.3450 as easing Fed rate hike expectations and Middle East optimism weigh on the US Dollar. Market participants are cautious ahead of the US Nonfarm Payrolls report, which could provide further direction for the pair.