falls as political pressure on Starmer rises, and USD strengthens amid safe-haven flows. Oil jumps as hopes for a US-Iran deal fade.
GBP/USD Falls as Political Pressure on Starmer Rises, and USD Strengthens on Safe Haven Flows
GBP/USD is falling on Monday as the US dollar strengthens on renewed geopolitical tensions, while mounting political pressure on Keir Starmer weighs on sterling.
The pound weakened ahead of another key speech from Starmer, who is facing growing unrest within the Labour Party following heavy losses in last week’s local elections. More than 30 Labour lawmakers have reportedly called for the Prime Minister to step aside or outline a timetable for his departure, intensifying speculation over his political future.
Former Deputy Prime Minister Angela Rayner warned the party may be facing its “last chance” to change direction. At the same time, Labour MP Catherine West urged Cabinet ministers to remove Starmer, threatening to push for a leadership contest if dissatisfaction grows following today’s speech.
The political uncertainty is raising broader concerns over policy continuity and fiscal direction at a time when markets are already sensitive to UK debt sustainability and growth risks. One figure increasingly discussed as a potential successor is Andy Burnham, although he is currently unable to challenge directly as he is not an MP.
Starmer’s speech is expected to focus on rebuilding ties with Europe, reflecting shifting public sentiment towards Brexit and closer EU cooperation.
USD supported by geopolitics and Fed outlook
The US dollar is strengthening on renewed safe-haven demand after both Washington and Tehran rejected each other’s latest peace proposals aimed at ending the conflict and reopening the Strait of Hormuz.
The main sticking point remains Iran’s nuclear programme, reducing expectations of a near-term agreement and increasing fears of prolonged disruption to energy markets.
The renewed tensions have pushed oil prices higher, reviving concerns just days after stronger-than-expected reinforced expectations that the could keep interest rates elevated for longer.
Higher oil prices, combined with resilient US economic data, continue to support Treasury yields and the dollar.
GBP/USD Forecast – Technical Analysis
GBP/USD has recovered from the 1.32 support zone, rising above the 200 SMA to a high of 1.36. The price trades above its rising trend line, which, combined with the RSI above 50, keeps buyers hopeful of further gains.
Buyers will need to rise above 1.36 to create a higher high, opening the door to 136.50 and on to 137.00. Above here, brings 138—70 into focus: the 2026 high.
On the downside, support is seen around the 1.3550 region, late last week’s low, and the rising trend line support. A break below here opens the door to 1.3450, the late April low, before exposing the 250 SMA at 1.3420. Below here, sellers could gain traction.
Oil Jumps as Hopes for a US-Iran Deal Fade
Oil prices rose sharply on Monday after Donald Trump described Iran’s response to the latest US peace proposal as unacceptable, undermining hopes for a breakthrough in negotiations.
had fallen around 6% last week on optimism that the 10-week conflict could move towards resolution and allow shipping through the Strait of Hormuz to normalise. However, the latest developments highlight how fragile those expectations remain.
Oil markets continue to trade heavily on geopolitical headlines, with prices reacting rapidly to comments from Washington and Tehran.
Attention is also turning towards Trump’s upcoming meeting with Xi Jinping in Beijing later this week, where discussions are expected to include Iran and the disruption to global energy flows.
Markets will watch closely for any signs that China could use its influence over Tehran to help de-escalate tensions and support the reopening of the Strait of Hormuz.
According to Saudi Aramco CEO Amin Nasser, the global market has effectively lost around one billion barrels of oil supply over the past two months, suggesting that energy markets may remain tight even if flows begin to normalise.
Oil Forecast – Technical Analysis
Oil ran into resistance at 111.00 last week, before rebounding lower, briefly spiking to a low of 88.60. However, the price quickly recovered and settled above the 50 SMA and the 38.2% Fib retracement of the 55.00 low and 120.00 high, reinforcing a bullish bias.
Buyers will look to rise above 100.00, the round number, and 105.00, the 23.6% Fib retracement, to retest 110/111.00. A rise above here creates a higher high and brings 120.00, the 2026 high, into focus.
Sellers, encouraged by slowing momentum with the RSI around 50, would need to settle below the 50 SMA and 95.00, the 38.2% Fib retracement level to create a more neutral structure. A break below 88.60, the May low, and 88.00, the 50% Fib retracement, creates a lower low and a more bearish structure, bringing 80.00 into focus.