The pair trades lower amid a stronger USD and declining UK gilt yields ahead of a potential US-Iran agreement.
GBP/USD hovers at 1.3440 in early European trading, pressured by a firmer US Dollar (USD) as markets await US President Donald Trump’s approval of a 60-day Memorandum of Understanding with Iran. The US Dollar Index (DXY) edges up to 99.06 but retreated from a seven-week high of 99.10 after reports of a tentative US-Iran deal.
The proposed agreement includes unrestricted energy flows through the Strait of Hormuz and the removal of US sanctions on Iranian ports. Meanwhile, UK 10-year gilt yields drop 1% to 4.81%, the lowest in nearly six weeks, as expectations for a near-term Bank of England rate hike fade.
Technically, GBP/USD remains below its 20-day Exponential Moving Average at 1.3463, signaling a mild bearish bias. The pair is confined between support at 1.3340 and descending resistance.