US to broaden secondary sanctions to isolate Iran

The British Pound Sterling maintained its strength against the US Dollar, trading around 1.3640, as investors focused on statements from US Treasury Secretary Scott Bessent regarding Iran's sanctions and Federal Reserve Chair Kevin Warsh's appearance at the Kansas City Fed's Jackson Hole Symposium. The GBP/USD remained near its opening price, showing minimal change.

Ahead of weekend events, a bid for the GBP was observed. US Treasury Secretary Bessent had written in the Financial Times, warning Iran of impending economic consequences and stating that countries associated with the regime might face retaliation from Washington. He was set to address the issue further in a press conference and Q&A session at 1700 GMT.

Iran, responding to Bessent's column, claimed that if the economic war persists, no oil would be exported through the Strait of Hormuz or the Persian Gulf. Meanwhile, the US Dollar Index (DXY) rose by 0.15%, reaching 98.98, contributing to the Pound's advance. With no US economic data on Monday, the focus shifted to housing data and the Consumer Confidence Index from the Conference Board on Tuesday.

GDP figures, durable goods orders, and the Core PCE inflation gauge were expected to be analyzed on Wednesday. On Friday, traders would review Warsh's speech, which was not anticipated to offer forward guidance for interest rates. However, a change in his economic outlook might provide some insights into the economic outlook. In the UK, Prime Minister Andy Burnham informed European Council President Antonio Costa that the United Kingdom would be more assertive in distancing itself from the European Union.

The GBP/USD experienced short-term gains despite the lack of expectation for a Bank of England rate hike at the September meeting. Prime Terminal's odds suggested a 78% chance of maintaining rates, while a 78% probability of a 25-basis-point increase by December was also predicted. In the daily chart, GBP/USD reached 1.3634, breaking through clusters of trend lines and a simple moving average triple around 1.3400, which now supported a bullish near-term outlook.

The pair stayed above the upward support lines drawn from 1.3159 and 1.3140. The Relative Strength Index (14) at 69.3 was approaching overbought territory, indicating strong but potentially overextended upward momentum. On the downside, initial support was near 1.3622 at the recent rising trend line, ahead of a broader demand range between the reclaimed downward line at 1.3493 and the previous resistance break at 1.3400.

This support, reinforced by the simple moving average cluster at 1.3399 and the earlier upward support trend near 1.3382, suggested that as long as GBP/USD remained above this layered support zone, the pair would likely stay bullish.