• GBP/USD dipped on Monday as investors assessed the impact of continued shipping disruption through the Strait of Hormuz and U.S.-Iran tensions escalated.
• The U.S. military said two Navy destroyers entered the Gulf to counter Iran’s blockade, and two American ships passed through the Strait of Hormuz, despite Iran claiming it had stopped a U.S. warship from entering.
• Confusion surrounding the headlines kept investors cautious, as mixed and rapidly changing reports made it difficult to assess the true risk environment.
• The pair is expected to remain tethered to geopolitical headlines in the near term, capped above 1.3600, as escalating conflict in the Middle East threatens to overshadow UK domestic fundamentals.
• Immediate resistance is located at 1.3601(Higher high), any close above will push the pair towards 1.3643(38.2%fib)
• Support is seen at 1.3509(50%fib) and break below could take the pair towards 1.3371(23rd April low ).
Recommendation: Good to sell around 1.3530 with stop loss of 1.3650 and target price of 1.3480
