Why is the British Pound weakening despite US-Iran deal hopes?

The GBP/USD pair drifts lower to near 1.3460 during early European trading hours on Thursday. Conflicting rhetoric from US and Iranian officials about a potential deal fuels market concerns, dragging the British Pound (GBP) lower against the US Dollar (USD). The US Initial Jobless Claims report will be released later on Thursday. US President Donald Trump said on Wednesday that he had very productive talks with Iran. Meanwhile, US Vice President JD Vance stated that deal negotiations with Iran would be messy and take time, saying that the Iranians are extraordinarily difficult people with a fractured system. Iranian Deputy Foreign Minister Kazem Gharibabadi said negotiations between Iran and Oman on reopening the Strait of Hormuz have continued for more than three weeks and produced broad agreement on proposed inbound and outbound shipping routes. However, an Iranian official denied that Tehran is currently holding talks with Washington over the key waterway. On the other hand, weaker-than-expected US economic data could undermine the Greenback and act as a tailwind for the major pair. Employment in the US private sector increased by 44K in July, compared to a rise of 98K in June, according to ADP on Wednesday. This figure came in below the market consensus of 70K. The US employment data for July will take center stage later on Friday. Any signs of weakening in the US labor market could prompt traders to push back their bets on Fed rate hikes and undermine the USD. Data lull keeps focus on UK Q2 GDP release. Strategists at Scotiabank highlight a quiet near-term macro backdrop for the Pound, noting that the release calendar is limited over the next week or so with no major data scheduled ahead of the preliminary Q2 GDP print on August 13. This leaves the upcoming growth figures as the key domestic catalyst for GBP/USD, with investors likely to treat the data vacuum as a period of consolidation before reassessing the UK outlook once the GDP numbers are in hand. Technical Analysis: GBP/USD maintains a constructive near-term outlook. In the daily chart, GBP/USD holds above both the 100-day simple moving average (SMA) and the Bollinger Bands’ 20-day middle SMA, reinforcing a bullish near-term bias as price works higher within the upper half of the recent range. The Relative Strength Index (14) around 57 suggests constructive momentum without yet venturing into overbought territory, leaving room for further gains while upside remains moderated by the upper Bollinger band. On the topside, initial resistance is located at the Bollinger Bands’ upper band near 1.3544, where buyers could face profit-taking and a pause in the advance. On the downside, immediate support is clustered around 1.3407/1.3405, where the 20-day Bollinger middle SMA and the 100-day SMA converge as a key demand zone; a deeper pullback would expose the lower Bollinger band support near 1.3271 if that floor gives way.