GBP/USD stalls around 1.3360 as Oil spike, geopolitics support USD
- GBP/USD holds near 1.3360 as Middle East tensions keep risk appetite fragile.
- Rising Oil prices lift the Dollar, with WTI up over 2.7% and DXY near 99.77.
- US jobless claims matched forecasts, leaving geopolitics as the main market driver.
The GBP/USD consolidates around 1.3360 on Thursday amid heightened tensions in the Middle East, as US President Donald Trump exerts pressure on Iran to reach a deal. Solid US jobs data maintained the status quo, which remains controlled by geopolitics. At the time of writing, the pair remains virtually unchanged.
Sterling trades flat as geopolitics overshadow data, keeping the US Dollar underpinned
Risk appetite turned sour after the US President Donald Trump said Iran to “get serious soon” before it's too late, as he acknowledged that Iranian negotiators are “very different” and “strange.” He said that, privately, they're begging for a deal, while publicly they say they’re looking at the proposal.
Earlier, Axios reported that the US Pentagon is preparing for a “final blow” against Iran, which would include the use of ground forces.
In the meantime, the US Dollar remains bid due to its positive correlation with Oil prices, with WTI, the US Crude Oil benchmark, gaining over 2.70% at $93.85 per barrel. The US Dollar Index (DXY), which tracks the buck’s value against six currencies, is up 0.14% at 99.77.
Meanwhile, traders worried that the energy shock sparked by the Middle East conflict is pushing gasoline and gas prices higher and expect that major central banks will keep interest rates steady or raise them in the near term. This, along with the deceleration of economic activity, keeps the stagflationary scenario looming.
In the US, Initial Jobless Claims for the week ending March 21 came at 210K as expected by analysts, up from the previous print of 205K. This reaffirms that the labor market remains solid and that the Fed could focus on the price stability mandate.
Ahead, eyes are on speeches by a handful of Federal Reserve officials, led by Governors Lisa Cook, Stephen Miran, Philip Jefferson and Michael Barr. Along with them, the Dallas Fed President Lorie Logan will cross the wires.
In the UK, traders eye the release of the GfK Consumer Confidence for March, expected to deteriorate from -19 to -24.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3360. The near-term bias is mildly bearish as spot holds below the clustered simple moving averages around 1.35 and continues to oscillate under the descending resistance trend line from 1.3869, indicating sellers remain in control on rallies. The rising support trend line from 1.3035 is losing immediate influence with price now pressed against its lower zone, suggesting downside pressure is challenging the broader uptrend structure.
Initial resistance aligns near 1.3430, where prior highs converge with the overhead moving average group, followed by the descending trend-line region around 1.3500, which caps the upside unless decisively broken. On the downside, immediate support sits at the recent 1.3340 area, with a break exposing the mid-1.32s, where prior lows cluster near 1.3220 as the next key level if bearish momentum extends.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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