GBP/USD climbs as US-Iran peace hopes weaken US Dollar

• US jobless claims beat forecasts, but Dollar remains headline-driven.
• Fed officials signal rates could stay elevated amid uncertainty.
• UK local elections threaten fresh pressure on Starmer’s leadership.

GBP/USD advances by some 0.28% on Thursday as the US and Iran appear close to signing a peace deal that could reopen the Strait of Hormuz, while keeping issues—like the nuclear program—unresolved. At the time of writing, the pair trades at 1.3627.

Pound rises as Hormuz reopening hopes pressure the Greenback

The mood in financial markets is positive, driven by news of a possible end to the conflict. Pakistani officials mentioned that the priority is a “permanent end to war.” Once achieved, the rest of the issues could be solved once direct talks resume between Washington and Tehran.

In the US, jobless claims data was solid, with Initial Jobless Claims for the week ending May 2, rising by 200K, down from 205K expected, up from the previous 190K number. Although the numbers are supportive of the US Dollar, the Greenback’s fate lies in resolving the Middle East conflict.

Other data showed that the US Challenger Job Cuts rose from 60.62K to 83.687K, according to Challenger, Grey & Christmas.

Regarding jobs data, most Federal Reserve officials noted that the labour market, although not at maximum employment, remains stable. Cleveland Fed Beth Hammack stated that “interest rates will be on hold for quite some time,” citing significant uncertainty in the economic outlook. Hammack added that the Fed’s statement should have a neutral stance about whether the next move is a cut or a hike.

In the UK, the focus is on local elections, in which the Prime Minister’s Keir Starmer party is expected to lose sharply. This will increase pressure on the PM, who is under heavy criticism after nominating Peter Mandelson as the UK ambassador to the US. In the first batch of the release of the Epstein files, Mandelson’s name surfaced, exerting pressure on Starmer, who could be ousted by members of its own party.

Traders’ eyes shift to speeches by Federal Reserve officials and the release of Nonfarm Payrolls data on Friday, with expectations of 62K jobs in April. In the UK, the docket is absent, leaving traders adrift to US Dollar dynamics.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3607, holding a bullish near-term bias as spot advances well above the clustered simple moving averages around 1.3417 and continues to respect the rising trend-line support traced from 1.3035, last intersecting near 1.3492. The recent push through the prior descending resistance line, which most recently capped prices around 1.3436 and now acts as a reclaimed floor, reinforces the constructive tone, while the FXS Fed Sentiment Index edging up toward 132 suggests the broader backdrop remains supportive of continued sterling strength against the dollar.

On the downside, immediate support is seen at the recent breakout and intraday floor near 1.3607, ahead of the rising trend-line support around 1.3492. A deeper pullback would expose the former descending resistance line now turned support at roughly 1.3436, converging with the triple simple moving average cluster near 1.3417, where buyers would be expected to defend the wider uptrend as long as daily closes remain above that area.

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