The pound sterling rose more than 0.16% after reports that Israel and Lebanon reached a ceasefire agreement, although subsequent statements that Hezbollah rejected the plan caused a modest pullback. The GBP/USD pair is trading at 1.3439, having bounced from its daily low of 1.3408.
GBP/USD climbs amid oil price decline and Hezbollah uncertainty
Hostilities in the Middle East persisted on Thursday, with Israel continuing operations in southern Lebanon. Israeli forces have started withdrawing from the Dibbin area, according to Al Hadath. Iran stressed that a Lebanese ceasefire is essential for progress in U.S.‑led peace talks.
A swift de‑escalation could ease inflationary pressures, as major central banks are expected to keep policy rates steady. In contrast, the Reserve Bank of Australia recently tightened by 75 basis points, citing energy‑price shocks and oil‑supply disruptions.
West Texas Intermediate crude fell 3.3% to $93.04, weakening the U.S. dollar because of its strong correlation with oil prices. The U.S. Dollar Index (DXY) is down 9.21% at 99.34.
U.S. initial jobless claims for the week ending May 30 came in at 225 000, above the 213 000 forecast and higher than the revised 212 000 from the prior week. The four‑week average stood at 214.75 000, roughly 5 000 above the previous reading of 209 000. Challenger job cuts in May rose to 97 000 from 83.387 000, with technology sector layoffs increasing by about 16%.
Despite these figures, the labor market remains resilient as traders await Friday’s May non‑farm payroll report, which is expected to add 85 000 jobs and keep the unemployment rate steady at 4.3%.
In the United Kingdom, political turmoil adds pressure on Prime Minister Keir Starmer, who faces internal party calls for his replacement after recent local‑election setbacks.
Bank of England officials have recently expressed support for the pound. Governor Andrew Bailey noted that, absent the Middle‑East volatility, inflation would be nearer the 2% target. MPC member Megan Greene highlighted a growing case for a rate hike.
Money markets are pricing about 47 basis points of BoE rate increases in 2026, implying expectations for at least two quarter‑point hikes.
GBP/USD Technical Outlook
On the daily chart the pair sits near 1.3434, trading around the midpoint of its recent range. It remains above an upward‑support trendline near 1.3387 but below the simple moving average at 1.3452, suggesting a broadly neutral bias with a slight downside tilt. The 14‑period Relative Strength Index sits around 47, indicating muted momentum, while the FXS Fed Sentiment Index at 148.83 signals that macro sentiment is supportive but not strong enough to break current technical barriers.
Immediate resistance lies at the simple moving average around 1.3452, with a stronger barrier at the downward‑resistance trendline near 1.3587. On the downside, the first support level is the upward‑support trendline at 1.3387; a sustained break below this level could expose recent lows and trigger a deeper correction within the broader consolidation zone.
(The technical analysis of this story was written with the help of an AI tool.)