• GBP/USD dipped on Monday as investors assessed renewed military exchanges between the U.S. and Iran.
• U.S. President Donald Trump said the United States was reinstating its blockade of Iranian shipping in the Gulf and would ensure the Strait of Hormuz stays open after the two sides exchanged more missile and drone attacks.
• Markets face a busy U.S. economic calendar this week that could provide fresh support for the U.S. dollar. The spotlight will be on Tuesday's release of the June Consumer Price Index (CPI), with headline inflation expected to ease on a monthly basis, while core inflation is forecast to remain steady at 2.8%-2.9% year-on-year.
• Sticky underlying price pressures could reinforce expectations that the Federal Reserve will keep interest rates higher for longer, leaving the door open to further policy tightening and underpinning the greenback.
• Investors were fully pricing a quarter-point interest rate increase by the Bank of England in November. On Friday, a hike was fully priced for December.
• Immediate resistance is located at 1.3416(Daily high), any close above will push the pair towards 1.3453(50%fib)
• Strong support is seen at 1.3359(Daily low) and break below could take the pair towards 1.3306(38.2%fib).
Recommendation: Good to sell around 1.3380, with stop loss of 1.3470 and target price of 1.3310
