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GBP/USD holds just above 1.3400 as bulls stay in control
GBP/USD was up less than 0.10% on the day and traders are waiting for Friday's US Nonfarm Payrolls for further clues on the Fed path.
GBP/USD is trading just above the mid-1.3400s, extending gains for a second straight day and holding modest intraday profits in early European trade, FXStreet reports.
The pair’s upside momentum is described as tentative, with spot prices lacking strong bullish conviction, and the move linked in part to easing inflation fears after optimism around a diplomatic resolution to end the Middle East conflict and the reopening of the Strait of Hormuz pushed crude oil to a four-week low.
FXStreet adds that traders have trimmed expectations for an imminent Fed rate hike, which is seen weakening the US dollar, a factor that can support GBP/USD, though investors are holding back on aggressive positioning while developments in the US-Iran conflict are monitored.
On the technical side, FXStreet says the near-term tone remains constructive while GBP/USD stays above the 200-hour simple moving average, with downside protection near 1.3400 and 200-period SMA support around 1.3379, while resistance is eyed near the 1.3500 psychological level.
Latest closeWTI crude $75.32 ▼6.2%|GBP/USD 1.345 ▼0.3%