The British Pound slipped against the US Dollar on Monday, ending a seven-day rally as tensions flared again in the Strait of Hormuz. GBP/USD traded near 1.3340, down from last week’s 1.3387 high, yet the pair held its near-term bullish trend.
The Pound ticked lower against the Dollar on Monday, attempting to close a seven-day rally as tensions rose again in the Strait of Hormuz, one of the critical points in the peace process between Washington and Tehran. GBP/USD traded near 1.3340, down from 1.3387 highs last week, although it kept a near-term bullish trend intact.
Hormuz threats weigh on risk sentiment
Iran’s Armed Forces command affirmed in local media that any vessel not following the designated route to cross the key waterway will endanger its security, and that US interference in the Strait will be met with a decisive response. The threats followed comments from Iran’s ambassador in China, Rahmani Fazli, who reaffirmed Tehran’s will to collect fees from vessels crossing Hormuz at a conference in Beijing last weekend, an idea the US plainly rejected.
Looking ahead, June’s S&P Global Construction PMI is the only UK release worth mentioning, while in the US the ISM Services PMI report and comments from Fed Governor Christopher Waller are likely to drive the Dollar later in the day.
Dollar strength keeps pressure on the pair
The broader Dollar backdrop remains firm, and traders often gauge it through the US Dollar Index. According to FXEmpire, sticky core inflation and fiscal deficits have reinforced the Dollar’s strength amid monetary policy divergence, with the index holding at $101.03 as it tested triangle resistance at $100.36. The same note said GBP/USD defended $1.3337, holding the floor of its rising channel with higher lows.
Levels to watch
On the FXStreet reading, failure to breach the 1.3385 area keeps the broader bearish structure in place, and momentum is easing as the MACD line crossed below its signal line. Bulls have stalled at trendline resistance near the 200-day SMA around 1.3400; a clean break would open the way toward the June 15 high at 1.3460 and the levels above 1.3500. On the downside, Thursday’s low at 1.3268 offers support ahead of the June 24 low at 1.3140 and the channel base near 1.3110.
Trading involves risk.
Risk Disclaimer
