GBP/USD slips as Oil surge, Iran conflict boost US Dollar

• GBP/USD falls 0.28% to 1.3366 as DXY climbs above 99.20.
• Oil spikes up to 30% intraday amid Strait of Hormuz disruption fears.
• Markets watch UK GDP, production data and BoE Governor Bailey speech.

The British Pound losses some ground versus the US Dollar on Monday as risk aversion keeps the Greenback bid, sponsored by the escalation of the Iran conflict. This triggered a sudden jump of oil prices, which are up 11%, retreating after gaining nearly 30% during the Monday’s Asian session. At the time of writing, GBP/USD trades at 1.3366, down 0.28%.

Greenback appreciated on risk-off mood, rising crude prices

Most G8 FX currencies depreciated against the American currency, which according to the US Dollar Index (DXY), posts gains of over 0.34%. The DXY, which measures the buck’s performance against six currencies, is at 99.20, after reaching a nearly three months high of 99.69, a level last seen late in November of 2025.

The rise on Crude Oil prices spurred by ships unable to pass through the Strait of Hormuz triggered adjustments in Oil production amongst Gulf countries, like Iraq, Kuwait and the United Arab Emirates. The lack of signs of a de-escalation of the conflict could trigger a second wave on inflation, increasing stagflation fears.

In the meantime, G7 finance ministers plan to discuss petroleum release from its reserves according to an article of the Financial Times (FT), which could temper the jump in Oil prices.

The New York Fed Survey of Consumer Expectations (SCE) revealed that inflation expectations for one year are seen at 3% in February, down from 3.1 % in January, while both for three and five years are anchored at 3%.

Monday’s economic docket in the UK was absent, yet traders are eyeing the release of BRC Retail Sales for February. Alongside this, traders are waiting for Industrial Production data, GDP figures and a speech by the Bank of England Governor Andrew Bailey.

In the US, the schedule will feature jobs data, housing data – namely Existing Home Sales, Building Permits and Housing Starts, inflation on the consumer side and the Federal Reserve favorite inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.

Given the backdrop and the rise of Oil prices, the US Dollar is poised to remain in the front seat due to its haven appeal. Hence, further GBP/USD downside is seen, unless the countries involved in the Iran conflict, decide to end the war, which would ease inflationary pressures and improve market mood.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3392. The near-term bias looks neutral with a slight bearish tilt as spot hovers just above the clustered 50/100/200-day simple moving averages around 1.3530–1.34 but remains capped by the descending resistance trend line from 1.3869. Price has slipped back below the recent sequence of lower highs while the upward-sloping support trend line from 1.3035 continues to hold, highlighting compression between long-term support and short-term selling pressure. The fading FXS Fed Sentiment Index, which has steadily retreated from above 123 to near 109, aligns with a softer macro backdrop for sterling against the dollar and limits the chances of a decisive upside break in the very near term.

Immediate resistance is seen at the descending trend-line zone near 1.3450, with a daily close above that area needed to reopen the path toward 1.3550 and the late swing high at 1.3695. On the downside, initial support emerges at the recent low around 1.3360, followed by 1.3300, where a break would expose the rising trend-line region projected from 1.3035 and signal an extension of the pullback. A sustained move below that dynamic support would strengthen the bearish case and shift focus toward 1.3200, while holding above 1.3360 keeps the pair locked in a broader consolidation beneath the downtrend line.

(The technical analysis of this story was written with the help of an AI tool.)