Both GBP/USD and AUD/USD traded with a constructive tone on Monday, despite escalating geopolitical tensions between the US and Iran. GBP/USD advanced 0.1%, trading around 1.3530 after retreating from last week's peak near 1.3600, and has consolidated between 1.3500 and 1.3600 in recent sessions. The pair remains above both the 50-day EMA at 1.3421 and the 200-day EMA at 1.3358, maintaining a clear bullish bias on the daily chart. The Stochastic RSI at 18.85 on the 15-minute chart signals oversold conditions, suggesting downside momentum may be slowing and a bounce could be possible if the 1.3485 support holds [1].
AUD/USD slipped roughly 0.2% on Monday, trading near 0.7180 after opening with a downside gap close to 0.7115. The pair recovered most of its early weakness but remains below Friday's peak around 0.7220. On the daily chart, AUD/USD trades at 0.7178, extending its advance above the 50-period EMA at 0.7009 and the 200-period EMA at 0.6779, keeping the near-term bias bullish. The Stochastic RSI at 98.19 is deep in overbought territory, indicating stretched upside momentum and potential vulnerability to a corrective pause, though price action remains supported above key EMAs [2].
The dominant macro driver for both pairs is the US-Iran ceasefire, set to expire Wednesday night. President Trump has called an extension "highly unlikely," and the US seizure of an Iranian cargo ship in the Gulf of Oman over the weekend has prompted Iran's Revolutionary Guard to threaten retaliation and reassert closure of the Strait of Hormuz until the US naval blockade is lifted. Despite these developments, markets are reluctant to price in downside risk: West Texas Intermediate futures jumped more than 6% to $89 a barrel overnight, yet equity futures firmed and risk-sensitive currencies, including the Australian Dollar, found buyers on dips [1][2].
This week's economic calendar is packed, with Tuesday bringing the UK labor market report, US Retail Sales, and Kevin Warsh's Senate Banking Committee hearing as Fed Chair-designate. Wednesday's UK CPI print is highlighted as the week's standout for the Pound, followed by Thursday's flash PMI readings from both the UK and US, and UK Retail Sales and University of Michigan sentiment data on Friday. However, Iran headlines are expected to remain the primary market focus [1][2].
A second round of talks in Islamabad is nominally planned for this week, but Tehran's Foreign Ministry stated Monday it had no confirmed plans to attend [2].
CONCLUSION
Despite heightened US-Iran tensions and the looming ceasefire deadline, both GBP/USD and AUD/USD have maintained bullish technical setups, supported by key moving averages and constructive intraday price action. Markets are pricing in a benign resolution, as evidenced by firm equity futures and continued buying in risk-sensitive currencies. The packed economic calendar may provide additional volatility, but geopolitical developments are expected to dominate market sentiment in the near term.