FX.co ★ Der | GBP/USD

GBP/USD extended its recovery for a third consecutive session on Thursday, advancing approximately 0.28% to trade near 1.3627 as the prospect of a definitive diplomatic breakthrough in the Middle East dismantled the U.S. Dollar’s safe-haven appeal. Market optimism reached a crescendo following reports from Pakistani intermediaries that Washington and Tehran are on the verge of a "permanent end to war," a deal that would prioritize the immediate reopening of the Strait of Hormuz while deferring complex nuclear negotiations to a later stage. This pivot toward regional stability has triggered a significant "peace dividend" across financial markets, funneled liquidity into risk-sensitive assets, and exerted sustained downward pressure on the Greenback. Even a relatively solid U.S. Jobless Claims report—which showed initial filings at 200,000, outperforming the 205,000 consensus—failed to spark a Dollar resurgence, as investors concluded that the geopolitical de-escalation outweighs incremental labor market resilience. This sentiment was further tempered by the Challenger Job Cuts report, which revealed that April layoffs surged to 83,687, providing a sobering backdrop to Friday’s high-stakes Non-Farm Payrolls (NFP) release. The fundamental narrative for the Greenback is currently caught between shifting geopolitical tides and a resolutely hawkish Federal Reserve. While Cleveland Fed President Beth Hammack recently suggested that interest rates may remain on hold for "quite some time" due to lingering economic uncertainty, her advocacy for a neutral policy stance has done little to deter traders from betting on a eventual pivot if the energy-driven inflation threat subsides with the reopening of the Strait. Across the Atlantic, the British Pound is navigating its own set of domestic hurdles, as Prime Minister Sir Keir Starmer faces a potentially bruising night in the local elections. The political fallout from the Peter Mandelson ambassadorial appointment—intensified by the recent surfacing of Mandelson’s name in unsealed Epstein files—has left the Prime Minister’s leadership under heavy scrutiny from within his own party. However, with the UK economic docket remaining quiet, the Sterling has managed to remain resilient, essentially "adrift" on the broader tide of Dollar weakness as the market awaits the 62,000 NFP print expected on Friday. From a technical perspective, the daily chart for GBP/USD reflects an undeniably constructive bias, with the pair trading comfortably at 1.3607. This bullish momentum is underpinned by a successful defense of the rising trend-line support originating from the 1.3035 level, which currently intersects near 1.3492. Furthermore, the pair’s ability to reclaim and sustain levels above the triple simple moving average cluster near 1.3417 indicates that institutional demand remains robust on shallow pullbacks. The recent breach of the prior descending resistance line—which has now transitioned into a reclaimed support floor near 1.3436—suggests that the "selling the rallies" mentality has been replaced by a "buying the dips" regime. This shift is further validated by the FXS Fed Sentiment Index climbing toward 132, signaling that the broader macroeconomic backdrop remains supportive of Sterling’s upward trajectory. In the immediate term, the 1.3607 level functions as a tactical intraday floor. Should the pair encounter a period of consolidation, the initial layer of structural demand is anchored at the 1.3492 rising trend-line, followed by the formidable 1.3417–1.3436 support zone where the moving average cluster resides. As long as GBP/USD maintains daily closes above this technical confluence, the path of least resistance remains skewed to the upside. Bulls are likely eyeing a move toward the 1.3700 psychological handle as their next major objective, provided the U.S. employment data does not deliver a hawkish shock that revitalizes the Greenback. For now, the combination of a looming peace deal in the Persian Gulf and a technically sound daily structure has placed the Pound in a prime position to capitalize on any further erosion of the Dollar’s dominance.