The British Pound (GBP) held steady during Friday’s North American session, holding above the 1.3300 level, but looks set to end the week with a loss of 0.20% against the US Dollar (USD). Risk aversion from the energy shock caused by the Middle East conflict and the attractiveness of the Australian dollar have GBP/USD on track for monthly losses of more than 1%.
Pound sees weekly losses as oil, war again worries sour sentiment
On Thursday, US President Donald Trump announced a delay of attacks on Iranian energy facilities by 10 days, until April 6. Initially, markets cheered the move as oil prices fell. Nevertheless, WTI reversed its initial decline as investors passed over the news.
Therefore, the mood remains gloomy – according to the US dollar index (DXY), Wall Street is reporting losses, and the dollar is expected to end the week with an boost of over 0.45%. DXY, which tracks the dollar against six other currencies, is at 99.94, virtually unchanged on the day.
The gloomy mood was deepened by the fact that the Islamic Revolutionary Guard Corps (IRGC) had cut off the Strait of Hormuz.
US data showed that US consumers became more gloomy as the University of Michigan Consumer Sentiment Index fell from 55.5 to 53.3, below forecasts of 54.0. Inflation expectations for the next twelve months increased from 3.4% in February to 3.8%, while remaining unchanged at 3.2% for five years.
In the UK, retail sales fell in February after a sturdy performance in January, reaching -0.4% m/m, down from 2% growth in the previous month.
Additionally, Alan Taylor of the Bank of England said that the bar for an interest rate boost is quite high, revealing that it is preferable to keep interest rates on hold until the central bank assesses the impact of the Iran war on the economy.
Traders expect further tightening of monetary policy by central banks
This week, money markets priced in the possibility of interest rate cuts by the Federal Reserve and the Bank of England. Instead, they see the Fed raising interest rates by 5 basis points at the end of the year. Prime Market Terminal data shows that the BoE will raise interest rates by 78 basis points.
(This story was corrected on March 27 at 16:25 GMT to say that the University of Michigan Consumer Confidence Index fell to 53.3, not 53.5, that five-year inflation expectations were unchanged at 3.2%, and that UK retail sales for January were 2%, not 1.8%).
GBP/USD Price Forecast: Technical Outlook
On the daily chart, the GBP/USD rate is 1.3311. The short-term bias is slightly bearish as the spot holds below the clustered plain moving averages near 1.35 and remains capped by the descending resistance line from 1.3869, which includes all the bounces from the recent highs at 1.38. The price’s return to a broad bearish pattern between this downtrend line and the ever-increasing support line from 1.3035 signals the waning of upside momentum, while the recent decline in the Fed Sentiment Index above 119,000 indicates that relative political expectations continue to favor the dollar on the margin.
Immediate resistance is located at the downtrend line currently crossing just above 1.3400 and then at the 1.3500/1.3520 zone where the daily moving averages converge and the prior swing highs cluster. A day close above this confluence would weaken the bearish bias and expose the 1.3700 area ahead of the high at 1.3869. On the other hand, initial support appears at 1.3220, the last swing low, with further trend around 1.3100, following the uptrend line from 1.3035. A break below this structural bottom would confirm a deeper bounce towards the psychological level of 1.3000.
(The technical analysis for this story was written with the lend a hand of an AI tool.)
Sterling price this week
The table below shows the percentage change of the British Pound (GBP) against the major currencies traded this week. The British pound was strongest against the Australian dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.11% | 0.26% | 1.06% | 1.44% | 0.93% | 1.05% | |
| EUR | 0.04% | -0.06% | 0.31% | 1.11% | 1.47% | 0.98% | 1.10% | |
| GBP | 0.11% | 0.06% | 0.32% | 1.16% | 1.56% | 1.04% | 1.09% | |
| JPY | -0.26% | -0.31% | -0.32% | 0.78% | 1.17% | 0.64% | 0.70% | |
| BOOR | -1.06% | -1.11% | -1.16% | -0.78% | 0.40% | -0.13% | -0.01% | |
| AUD | -1.44% | -1.47% | -1.56% | -1.17% | -0.40% | -0.51% | -0.46% | |
| NZD | -0.93% | -0.98% | -1.04% | -0.64% | 0.13% | 0.51% | 0.05% | |
| CHF | -1.05% | -1.10% | -1.09% | -0.70% | 0.01% | 0.46% | -0.05% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select British Pound from the left column and move along the horizontal line to US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
