GBP/USD rebounds to 1.3500 as Fed's Bowman backs July cut, Iran tensions flare

• GBP/USD climbs from 1.3369 low as Bowman signals July rate cut could be appropriate.
• US strikes on Iran nuclear sites spark market volatility; Tehran closes Strait of Hormuz, retaliates.
• UK Flash Services PMI improves to 51.3; US Manufacturing beats, Services dips slightly.

The Pound Sterling advances during the North American session, up 0.37% against the US Dollar, as risk appetite improved amid developments in the Middle East. At the time of writing, the GBP/USD trades at 1.3500.

Sterling rises 0.37% as dovish Fed comments offset Mideast risk surge and improve risk appetite

On Saturday, the United States (US) attacked Iran's nuclear facilities, triggering a risk-off open in the current trading week. The Greenback rose, while Oil prices gapped up; however, WTI has recently been facing downward pressure.

Tensions in the Middle East remained high. Iran retaliated, approving the closure of the Strait of Hormuz, and launched missile strikes against Israel. US officials revealed that Iran's retaliation actions could come as soon as the next day or two. Despite this, the White House is still looking for a diplomatic resolution, according to Reuters sources.

However, dovish comments from Federal Reserve Governor Michelle Bowman, favoring a rate cut in July, weighed on the US Dollar. The GBP/USD has recovered from daily lows of 1.3399, near the 50-day Simple Moving Average (SMA).

Recently, the US S&P Global Manufacturing PMI for June came in at 52.0, above expectations of 51.0 but unchanged compared to the previous reading. The Services PMI dipped from 53.7 to 53.1 in June, a tick above estimates of 53.0.

In the UK, the economy shows some signs of recovery as the S&P Global Services Flash PMI increased to 51.3 in June, up from 50.9, shy of forecasts of 51.5. The Manufacturing PMI continued to show contractionary readings of 7.7, up from 46.6 estimates.

GBP/USD Price Forecast: Technical outlook

The GBP/USD uptrend remains in place but faces stiff resistance. Buyers need to push the exchange rate above the 20-day simple moving average (SMA) of 1.3508. This will clear the path to challenge 1.3550, 1.3600, and the year-to-date (YTD) high of 1.3631. Conversely, a daily close below 1.3500 will expose the pair to a pullback, with sellers eyeing the 50-day SMA at 1.3399.