Today, at the beginning of the new week, GBP/USD is showing a positive bias, targeting the 1.3660 level. Moreover, fundamental factors favor the bulls, supporting the likelihood of a continued rise within the nearly month-long upward trend.

The US dollar is once again facing difficulties that are preventing a significant recovery, keeping it close to its lowest level in the past three months. This is considered one of the main factors supporting GBP/USD. Traders are reducing their expectations of an imminent Federal Reserve (Fed) interest-rate hike amid signs of easing inflationary pressures. In addition, the US Treasury announced the day before, more specifically last Wednesday, that purchases of long-term government bonds would be doubled starting in September, which triggered a correction in US Treasury yields. This is keeping dollar bulls on the defensive and strengthening the short-term positive outlook for the currency pair.

Nevertheless, further escalation of the conflict between the United States and Iran could support the dollar as a safe-haven asset, temporarily limiting its losses. Today, Monday, US Treasury Secretary Scott Bessent is expected to announce a series of the strictest sanctions against Iran. In response, Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, stated that the Islamic Republic would halt oil exports through the Strait of Hormuz and other Persian Gulf countries if the economic war continued. He warned that any country participating in the US sanctions would be considered an adversary of Iran. This creates additional geopolitical risks, which in turn should support the US dollar.

In addition, inflationary risks arising from oil-price volatility increase the likelihood of at least one Fed rate hike by the end of this year. This could discourage traders from opening new bearish positions against the dollar and limit the upside in GBP/USD.

For better trading opportunities, attention should be paid to the upcoming release of the US Personal Consumption Expenditures (PCE) Price Index on Wednesday, followed by a speech by Fed Chair Kevin Warsh at the Jackson Hole symposium.

Investors are awaiting new signals regarding the Fed's monetary policy, which will be crucial in determining the dollar's short-term dynamics and could have a significant impact on the currency pair's movement.

From a technical perspective, GBP/USD is targeting a breakout and consolidation above the 1.3660 level before the next stages of growth. Conversely, any pullbacks toward 1.3600 are likely to be quickly bought and limited by support at 1.3570. The oscillators are positive, confirming the bulls' advantage, while the Relative Strength Index is close to overbought territory, indicating bullish consolidation.

The table below shows the percentage change in the US dollar's exchange rate against major currencies over the past seven days. The US dollar showed the greatest strength against the Japanese yen.