GBP/USD lurched back above 1.3500 on Monday as investors brace against weekend missile attacks.
A tentative ceasefire may prove market bets of a cooldown correct.
Double-header appearances from central bank heads is due on Tuesday.
GBP/USD gained ground on Monday, lurching higher after the US chose to get directly involved in the spiraling Israel-Iran conflict that started recently. The Trump administration, skirting around congressional authority, ordered a barrage of attacks on Iranian nuclear facilities over the weekend, sparking a surge in crude oil markets. Following Iran’s retaliatory attacks early Monday on US Air Force installations in Qatar, all parties have tentatively agreed to a ceasefire, and talks between Iran and Israel are expected to begin.
The tumultuous evolution of Middle East conflicts sparked a bearish pivot in Greenback markets as investors banked on a slowdown in tit-for-tat missile attacks. The global pivot out of the US Dollar sent Cable bids back above the 1.3500 handle.
Coming up on Tuesday, Bank of England (BoE) Governor Andrew Bailey will be testifying before the Economic Affairs Committee in the UK Parliament. The UK has been battling a meandering economy in recent months, and Governor Bailey is expected to hold steady to BoE messaging.
Federal Reserve (Fed) Chair Jerome Powell makes his own appearance in government testimony, kicking off two days of speeches before congressional and Senate economic committees. Market attention will be much more focused on Fed head Powell, as investors await to see how the Fed will react to ongoing derision from US President Donald Trump over the Fed’s reluctance to deliver rate cuts that could benefit Trump’s deficit-swelling budget bill.
GBP/USD price forecast
GBP/USD rallied back above the 1.3500 handle on Monday after a failed attempt to get back over the near-term technical barrier last week. An early-hours plunge saw Cable take a technical bounce from the 1.3400 key level, sparking an extended rise through the early week’s trading session.
GBP/USD daily chart
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