GBP/USD advances past 1.3450 on soft USD despite Mid-East tensions

• GBP/USD rises to 1.3467 after touching a session high of 1.3483.
• Existing Home Sales beat expectations, while ADP jobs edge up to 15.5K.
• Markets price ~40 bps of Fed easing as traders await key US CPI report.

The Pound Sterling post modest gains during the North American session as the Greenback remains weaker even though tensions in the Middle East remains high, despite US President Trump comments that the end of the war is near. The GBP/USD trades at 1.3467 after hitting a daily high of 1.3483.

Sterling boosted by risk-on mood, traders eye US CPI

Market mood improved with US equities aiming higher, as investors remain confident that the US President Donald Trump would end the war, even though Iran’s new regime said reaffirmed they’re not looking for a truce.

In the meantime, hostilities notched a level up as the Pentagon said that they’re conducting the most intense day of attacks against Iran and won’t give up until the Islamic Republic is defeated, was read at a Bloomberg article.

The eruption of the Middle East conflict struck inflation fears; hence market participants had priced in a rate cut by the Bank of England at the March 19 meeting. As of writing, money markets expect the BoE to hold rates, with odds standing at 88%.

US jobs and housing date, fare better than expected

In the US, the economic docket featured the US ADP Employment Change 4-week average which came at 15.5K, up from the previous week 12.75K reading. Other data revealed that Existing Home Sales increased in February, exceeding estimates for a -5.9% contraction, rose 1.7%, up from January’s -8.4% plunge.

Expectations that the Federal Reserve will reduce rates this year, moderated somewhat. Investors seem confident that the Fed will cut rates 40 basis points towards the end of the year, according to Prime Market Terminal.

On Wednesday, the US economic docket will feature the release of the February’s Consumer Price Index (CPI). If the reading exceeds the estimated 2.5%, investors may need to reconsider their positions. Additionally, should the conflict in the Middle East persist and oil prices continue to rise, inflationary pressures could hinder the US central bank from implementing policy easing measures.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3466. The near-term bias is mildly bullish as price holds above the rising support trend line that has underpinned the advance from the 1.30 area, while the latest closes remain clustered around and just above the grouped 50–200 day simple moving averages near 1.35, indicating an emerging base after the pullback from the 1.38 region. The downside rejection around the upward-sloping trend support and the inability of the descending resistance line from 1.3869 to force a sustained break lower suggest buying interest is absorbing dips, even as the broader move off recent highs caps momentum for now.

Initial support is seen at the confluence of the daily close and the rising trend line around 1.3450, with a break exposing the 1.3400 area where the key simple moving averages concentrate, and then 1.3360 as deeper support. On the upside, immediate resistance aligns with the descending trend line in the 1.3530–1.3550 band, and a daily close above this barrier would open the way toward the late-January highs around 1.3690, followed by the 1.3800 zone where prior swing highs and the origin of the current corrective phase converge.

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