British Pound bounces as US-Iran reach a deal, hitting the US Dollar

• Axios report fuels optimism over a 60-day ceasefire deal.
• Hot Core PCE keeps Fed rate-hike risks firmly alive.
• UK political uncertainty limits Pound gains before Bailey’s speech.

The British Pound pares some of its earlier losses and edges up by 0.08% amid reports that the US and Iran reached a deal, pending confirmation from US President Donald Trump, according to Axios. At the time of writing, the GBP/USD trades at 1.3437 after bouncing off daily lows of 1.3367.

GBP/USD recovers as ceasefire hopes pressure the Greenback

Axios reported that “U.S. and Iranian negotiators have reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran's nuclear program, but President Trump has yet to give his final approval,” according to two US officials and a regional source involved in the mediation process.

According to the article, both sides are pending approval from senior leadership.

After the headline, the Greenback edged lower as depicted by the US Dollar Index (DXY). The DXY, which measures the performance of the American currency against the other six, is down 0.17% at 99.05.

Data released earlier showed that US inflation remained above the 3% threshold in April, according to the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge. The Core PCE rose from 3.2% to 3.3% YoY, driven by high energy prices stemming from the US-Iran war.

At the same time, the Gross Domestic Product (GDP) for the first quarter was downward revised from 2% to 1.6% YoY in the second estimate, as revealed by the US Bureau of Economic Analysis. Also, the US Department of Labour showed that the number of Americans filing for unemployment benefits rose by 215K in the week ending May 23, exceeding forecasts of 211K.

Recently, Federal Reserve officials crossed the wires. The St. Louis Fed President, Alberto Musalem, said that a rate hike might be needed if inflation doesn’t ease. Earlier, the NY Fed President John Williams stated that monetary policy is in the right place given the outlook.

Across the pond, political turmoil is escalating as rivals to the current UK Prime Minister, Keir Starmer, position themselves to challenge Starmer’s leadership at the Labour Party.

This week, the UK economic calendar will feature a speech by Bank of England Governor Andrew Bailey. In the US, traders' focus will be on Fed officials Schmid, Bowman, Paulson and Daly.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3436. The pair sits just under the clustered simple moving averages (SMA) from the Moving Average Triple around 1.3445, leaving the near-term tone capped despite the broader recovery off the 1.3159 trend-line base. Price holds above the rising support trend line drawn from that low, but a neutral Relative Strength Index (RSI) near 47 hints at fading momentum as spot consolidates between this structural floor and the overhead SMA barrier.

On the topside, immediate resistance is defined by the Triple SMA cluster near 1.3445, with a stronger cap aligning with the prior downtrend-line break region around 1.3611. On the downside, the first layer of support is the current trend-line zone near 1.3436, ahead of the former break area around 1.3339, while a deeper setback would expose the broader structural base toward the 1.3159 region.

(The technical analysis of this story was written with the help of an AI tool.)