GBP/USD trims some of its previous-day gains on Friday, down by 0.84%, as traders turn risk-averse amid an escalation of the Middle East war and price in no rate cuts by the Federal Reserve (Fed) in 2026. At the time of writing, the pair trades below 1.3350 after hitting a daily high of 1.3442.
💡 DMK Insight
GBP/USD’s drop of 0.84% highlights a shift in trader sentiment as geopolitical tensions rise. With the pair now trading below 1.3350, this movement reflects a broader risk-off attitude, particularly as traders digest the Fed’s stance on interest rates. The absence of expected rate cuts in 2026 could lead to a stronger dollar, putting further pressure on GBP/USD. Watch for potential support around 1.3300, which could be a critical level to monitor. If the geopolitical situation worsens, we might see a flight to safety, further strengthening the dollar against the pound. On the flip side, if tensions ease, there could be a rebound, but that seems less likely in the current climate. Keep an eye on economic indicators from both the UK and US, as they could provide additional context for future movements in this pair.
📮 Takeaway
Monitor GBP/USD closely around the 1.3300 support level; further geopolitical tensions could drive the pair lower.




