The GBP/USD pair receives some support near 1.3382, but it lacks bullish momentum and remains below the round level of 1.3400. However, spot prices are being held back from a sharper correction from the four-week high around 1.3453, reached on Friday amid mixed fundamental signals.

Andy Burnham, the former mayor of Greater Manchester, has garnered support from the majority of Labour MPs to replace Keir Starmer as Prime Minister of the UK, which has somewhat eased concerns about political instability. This, along with forecasts of a 25-basis-point rate hike by the Bank of England by the end of 2026, provides support for the British pound. However, rising tensions between the U.S. and Iran are strengthening the U.S. dollar as a safe-haven asset and may limit further gains for the GBP/USD pair.

U.S. military forces have initiated a new round of strikes against Iran after the Islamic Revolutionary Guard Corps (IRGC) announced the closure of the Strait of Hormuz and attacked another commercial vessel in this crucial waterway. Tehran, in response, has retaliated with a series of attacks on U.S. military bases in the region, reinforcing the dollar's position as a safe-haven asset. Furthermore, rising oil prices have revived inflation concerns and heightened expectations for a U.S. Federal Reserve rate hike, further supporting the dollar and restraining the growth of the GBP/USD pair.

No significant economic data is expected on Monday that could affect the market, either from the UK or the U.S., so spot prices will largely depend on dollar movements. Later in the North American session, traders will focus on speeches by influential FOMC members. However, market emphasis remains on the latest U.S. inflation data, which will dictate expectations regarding Fed monetary policy. This, in turn, could significantly impact the U.S. dollar and the GBP/USD currency pair in the latter half of the week.

From a technical perspective, the pair has shown resilience below the 9-day EMA and is currently attempting to break through the convergence of the 50-, 100-, and 200-day SMAs. If this is achieved, bulls will gain more advantage in the market. Nonetheless, oscillators have gradually moved into positive territory, indicating that bulls are gaining strength.