Currency markets have been dawdling ever since the initial announcement of the US-Iran ceasefire, but have not found any significant momentum to trigger a breakout. GBP/USD, holding between 1.3450 and 1.36, tried to push above its range, but the lack of diplomatic progress just stalled the move.
Markets have been trading in a gigantic geopolitical cloud since the middle of April, and while some indicators, including a new Iranian proposal, pointed to a better situation last week, the clouds remained.1
The US is maintaining its blockade on Iran to prevent it from being the only one to profit from the Strait of Hormuz, with $5Bn of energy-trading revenue stream frozen2, leaving Iran with no economic lifeline. This is the American strategy to pressure the Islamic regime into a deal, but despite a few attempts, no diplomatic common ground was found.
While the strategy is seemingly working for the US, Markets are beginning to smell trouble, with WTI Crude oil rising and holding above $100 over the past week3 and the US dollar making its way back to the top of the FX board.
With announcements, still to be confirmed, of Iran shooting a US warship in its international waters4 at the beginning of the week, GBP/USD quickly rejected its breakout attempt from the weekly open, now back into its 1.3440 to 1.36 range.
Sellers had control over price action in the early morning, but after the US denied the Iranian claim5, which initially quickly brought back war fears and flows, the FX market quickly stalled in a deadlock.
The price action in the major Forex pair is now stalling at the 1.35267 4H 50-period moving average, with traders watching the technical indicator to spot which side will take the momentum.
GBP/USD 4H chart, May 4, 2026. Source: TradingView. Past performance is not indicative of future results.
Resistance levels
- December resistance 1.3560 to 1.36
- Past week highs 1.36578
- Next resistance 1.37
- 2025 highs 1.37840
Support levels
- 50-4H moving average 1.35267
- Key pivot 1.34 to 1.3440
- Pivotal support 1.3250 - 1.33
- 1.32 War support
This article and its contents are intended for educational purposes only and should not be considered trading advice. Forex trading is high-risk. Losses may exceed deposits.
