The GBP/USD currency pair traded in negative territory around 1.3445 during early European trading hours on Friday, weakening below the 1.3450 level [1]. This movement comes amid heightened tensions in the Middle East and rising global oil prices, which have provided support to the safe-haven US Dollar (USD) against the British Pound (GBP) [1]. The Michigan Consumer Sentiment Index is scheduled for release later on Friday, which could further influence market sentiment [1].
On the geopolitical front, Iranian Parliament Speaker Mohammad Bagher Ghalibaf condemned a US attack on civilian homes on Qeshm Island, describing it as a continuation of American actions in southern Iranian cities. The US reportedly launched missile strikes across southern Iran, including Qeshm Island and parts of Bushehr, Fars, and Khuzestan provinces on Thursday [1].
From a monetary policy perspective, financial markets have priced in a more than 90% chance that the Bank of England (BoE) will keep borrowing costs on hold, with only an outside chance of a rate hike. Traders anticipate a potential rise in borrowing costs to 4.0% before the end of the year [1]. Analysts at Brown Brothers Harriman expect the BoE to maintain the policy rate at 3.75% for a fifth consecutive meeting, citing a less concerning UK inflation backdrop that gives the central bank room to pause further tightening [1].
Technically, GBP/USD maintains a modest bullish bias as it remains above the 100-day simple moving average (SMA) and the Bollinger middle band, indicating underlying dip-buying interest after recent consolidation. The Relative Strength Index (RSI) is around 57, suggesting constructive but measured upside momentum [1]. Immediate support is seen at the 100-day SMA (1.3400) and the Bollinger middle band (1.3390), with deeper support at the lower Bollinger band (1.3265). Resistance is noted at the upper Bollinger band (1.3515), with a break above potentially targeting the July 15 high of 1.3558 [1].
CONCLUSION
GBP/USD has weakened below 1.3450 amid geopolitical tensions and a stronger US Dollar, while the Bank of England is widely expected to keep rates unchanged due to easing UK inflation. Technical indicators suggest underlying dip-buying interest, but further upside may depend on breaking key resistance levels and upcoming economic data.