GBPUSD climbs past 100-day MA as dollar weakens

Sterling pushed higher against the dollar, breaking through its 100-day moving average, as news about Iran weighed on the greenback.

The pound reached fresh session highs on Tuesday after reports emerged of a possible US-Iran deal, which dragged oil prices and Treasury yields lower and pressured the dollar.

Al Araby Al Jadeed reported that Qatar and Pakistan put forward a plan involving an unannounced IAEA visit to Iranian nuclear sites and the release of $6 billion in interest from frozen Iranian assets. The proposal is said to have US backing and some prior Iranian support, though disagreements persist and formal approval has yet to be announced.

Markets are reacting to hopes of eased tensions. December crude futures slipped under $96, having traded above $101 earlier in the day. The US 10-year yield fell 4.6 basis points to 5.089%, retreating further from last week's peak near 5.36%.

Cheaper oil could alleviate some inflation worries, while lower yields reduce the dollar's rate advantage. GBPUSD saw the most significant movement, with buyers lifting the pair above its 100-day moving average for the first time since September 16. Remember, a higher GBPUSD translates to a stronger pound against the dollar—and a weaker dollar versus the pound.

The headlines are the trigger, but the technicals will set the course.

The move above the 100-day moving average at 1.33875 signals a bullish shift for buyers. Maintaining a foothold above that level would be ideal for preserving upward momentum.

Yet the price is entering a zone where buyers face tougher resistance:

• 1.33875: The 100-day moving average and the initial support after the breakout.

• 1.34056: The 50% retracement of the drop from the August 2026 high to last week's low at 1.3136.

• 1.34314: The 200-day moving average and the next key resistance point.

Today's peak reached 1.3409, nudging just above the 50% midpoint. Buyers have temporarily cleared that level; the question is whether they can sustain it and push toward the 200-day moving average.

The midpoint is significant because it splits the prior decline in half. Moving above it means buyers have retraced more than half of the fall. Holding above it would reinforce the recovery narrative.

Why sellers might step in here

Despite the bullish momentum, a rally into major technical levels often attracts selling interest.

Early buyers who entered at lower prices may lock in profits. Sellers may also position against resistance because it provides a clear reference for risk management. If the price surges above their chosen level and stays there, the rationale for the trade weakens.

This doesn't guarantee a reversal. It explains why upward progress may stall as the price navigates the midpoint and approaches the 200-day moving average.

What could derail the bullish outlook?

The immediate challenge is for buyers to hold above 1.33875. A dip back below the 100-day moving average would tarnish the breakout and shift focus to 1.3371, last week's high.

I'd prefer not to see the price fall below that level during a pullback. A break above last week's high followed by a drop back beneath it would signal that buyers are struggling to maintain the breakout, potentially unwinding today's gains.

The buyers have made a bold move. Now they must defend it. Staying above the 100-day moving average keeps the bulls in control. Clearing—and holding—the midpoint and then the 200-day moving average would further solidify the bullish case.