Summary

• GBP/USD remains supported despite renewed US-Iran tensions, with traders now closely focused on upcoming US labour market data and University of Michigan consumer sentiment figures that could drive near-term volatility in the pair.
• Intermarket dynamics favour further upside for sterling, as the UK-US implied interest rate spread has steepened significantly, reinforcing expectations that the Bank of England may stay relatively more hawkish than the Fed Reserve.
• Technical indicators suggest a potential bullish reversal is underway, with GBP/USD rebounding from its ascending channel support, holding above its 20-day and 50-day moving averages, while momentum indicators point to strengthening upside momentum above the 1.3530 support zone.

By Kelvin Wong

After the sterling hit a 2-month high of 1.3658 on May 1, 2026 against the US dollar, the GBP/USD has traded sideways, and on Thursday, May 7, 2026, it declined by 0.2% to print an intraday low of 1.1723

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