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GBP/USD rebounds toward 1.3530 as US Dollar eases after recent surge

April 20, 2026

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Cable recovered after an early gap lower on fresh Middle East tensions.
Rising Oil prices and Hormuz disruption kept inflation fears elevated globally.
UK sentiment weakened as traders awaited jobs data and Fed headlines.

GBP/USD recovers some ground after opening the week on a lower note, despite escalating tensions in the Middle East as the US seized an Iran-flagged vessel. At the same time, Tehran threatened to halt talks in Pakistan. The pair trades at 1.3525, up 0.13%.

Sterling recovers as traders weigh war risks and UK gloom

The US-Iran conflict is grabbing the attention as tensions boiled over the weekend, as Iran demanded that Washington end the blockade in the Strait of Hormuz. Consequently, Cable gapped down, opening the week at around 1.3480, but it has recovered some ground as the Greenback edges lower, some 0.05% according to the US Dollar Index (DXY).

The DXY, which measures the buck’s value against a basket of six currencies, is at 98.17 after hitting a six-day high of 98.39 at Monday’s Asian opening on geopolitical news.

West Texas Intermediate (WTI) Oil is surging sharply, up nearly 3.90% at $87.37 per barrel, adding to worldwide inflationary pressures on supply concerns and the shutdown of the Strait of Hormuz.

The US economic docket is absent. Yet, traders are looking ahead to April 21’s hearing before the US Senate on Trump’s nominee, Kevin Warsh, to become the next Federal Reserve Chair, succeeding Jerome Powell.

In the UK, British consumer morale hit its lowest level since mid-2023, according to two surveys. S&P Global announced that consumer sentiment fell to 42.3 from 44.1, a 33-month low, while Deloitte said its quarterly gauge of confidence tanked to its lowest level since Q3 2023.

The S&P survey revealed that more than half of the respondents expect a rate hike by the Bank of England (BoE).

Meanwhile, domestic political issues are weighing on Sterling, as the Sun reported that Manchester Mayor Andy Burnham met with former UK Deputy PM Angela Rayner on Friday, fueling speculation that the two are plotting to oust PM Keir Starmer.

Looking ahead, the UK economic schedule will feature employment data on Tuesday. In the US, traders will eye the ADP Employment Change 4-week average, Retail Sales and Warren’s appearance at the US Senate.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3524. The pair holds a bullish near-term bias as spot remains above the latest simple moving average from the triple set at 1.3422, while also trading over the prior downtrend break level near 1.3027, suggesting underlying demand on dips. The recovery, however, still unfolds below the former uptrend break reference around 1.3844, indicating that the broader upside remains incomplete and that gains are occurring within a corrective phase rather than a clean trending move.

On the downside, immediate support is located at the 1.3422 simple moving average, with a deeper cushion emerging towards the prior downtrend break level at 1.3027 if selling pressure accelerates. On the topside, a sustained push toward the 1.3844 former uptrend break zone would be needed to reopen the path to more meaningful sterling strength, while failure to hold above the moving average support would hint that the current bullish bias is starting to fade.