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British Pound holds firm as Hormuz shock lifts Oil, Dollar

British Pound holds firm as Hormuz shock lifts Oil, Dollar

FXStreetFXStreet2026/07/08 16:54
By:FXStreet

The Pound Sterling (GBP) posts modest gains during the North American session on Wednesday amid growing tensions in the Middle East, as US President Donald Trump's said the deal with Iran was “over” after both countries exchanged attacks over the last couple of days. At the time of writing, the GBP/USD pair trades at 1.3371, up 0.09%.

GBP/USD steadies as geopolitical risk offsets Dollar strength

During the last couple of days, Tehran and Washington exchanged blows after Iran hit two vessels sailing through the Strait of Hormuz, triggering a response from the US. The US CENTCOM reported that it attacked 80 targets during the last two days. In addition to the attacks, the US reimposed sanctions on Iran’s Oil, while Trump threatened to resume the blockade in Hormuz.

Energy prices jumped, with the US crude Oil benchmark, West Texas Intermediate (WTI), rising nearly 5% to $75.60.

The US economic docket will feature the release of the June FOMC minutes, the first under the new Chair, Kevin Warsh. Aside from this, geopolitical developments and improved relations between the US and Iran might be catalysts for the trading session.

In the meantime, the US Dollar Index (DXY), which measures the performance of the American currency against the other six, is up 0.10% to 101.19, bolstered by the rise in WTI.

Money markets remain confident that the US Federal Reserve (Fed) might increase borrowing costs at least once in 2026, with odds of 94%. For the July meeting, traders had priced in a 65% chance of a rate hold, according to Prime Terminal data.

On Thursday, the US economic schedule will feature the release of Initial Jobless Claims for the week ending July 4.

In the UK, uncertainty over the pick of a finance minister for the upcoming Prime Minister, Andy Burnham, keeps investor tensions high. According to Polymarkets, there’s a 51% chance that the left-leaning former energy minister Ed Miliband will take on the role.

Bank of England (BoE) Deputy Governor Sarah Breeden will cross the wires amid a scarce economic docket.

GBP/USD Price Forecast: Technical outlook

GBP/USD daily chart

On the daily chart, GBP/USD trades at 1.3365, keeping a mildly bearish near-term tone as it holds under the cluster of simple moving averages around 1.3401 and remains capped well below the descending resistance trend line near 1.3509. The Relative Strength Index (14) at 53.8 drifts just above neutral, hinting at a modest recovery in momentum, yet this improvement is not sufficient to offset the overhead technical barriers that continue to weigh on the pair.

On the topside, initial resistance is located at the grouped 50-, 100- and 200-day simple moving averages around 1.3401, with a subsequent hurdle at the downward-sloping trend line break level near 1.3509. On the downside, the structural floor is defined by the upward support trend line originating from 1.3159, and a clean break toward that zone would likely reinforce the prevailing bearish bias despite the currently stabilizing momentum backdrop.

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

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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