The GBP/USD currency pair consolidated around 1.3360 on Thursday, as heightened tensions in the Middle East and a spike in oil prices supported the US Dollar [1]. US President Donald Trump increased pressure on Iran, urging them to 'get serious soon' and suggesting that Iranian negotiators are 'very different' and 'strange.' Trump claimed that, privately, Iranian negotiators are eager for a deal, while publicly they appear hesitant [1]. Axios reported that the US Pentagon is preparing for a 'final blow' against Iran, potentially involving ground forces [1].
The US Dollar remained bid due to its positive correlation with oil prices, as WTI crude oil gained over 2.70% to $93.85 per barrel. The US Dollar Index (DXY) rose 0.14% to 99.77, reflecting the currency's strength amid geopolitical uncertainty [1]. Traders expressed concern that the energy shock from the Middle East conflict is driving gasoline and gas prices higher, and anticipated that major central banks may keep interest rates steady or raise them in the near term. This, combined with slowing economic activity, has led to fears of a stagflationary scenario [1].
US Initial Jobless Claims for the week ending March 21 were reported at 210K, matching analyst expectations and up from the previous print of 205K. This data suggests the US labor market remains solid, allowing the Federal Reserve to focus on its price stability mandate [1]. Market participants are also awaiting speeches from several Federal Reserve officials, including Governors Lisa Cook, Stephen Miran, Philip Jefferson, and Michael Barr, as well as Dallas Fed President Lorie Logan [1].
In the UK, attention is on the upcoming release of the GfK Consumer Confidence for March, which is expected to deteriorate from -19 to -24 [1]. Technically, GBP/USD trades at 1.3360 with a mildly bearish near-term bias, as the spot remains below clustered simple moving averages around 1.3500 and under a descending resistance trend line from 1.3869. Immediate resistance is near 1.3430, while support is at 1.3340, with a break potentially exposing the mid-1.3200s [1].
CONCLUSION
GBP/USD remains stable at 1.3360, with downside pressure prevailing amid geopolitical tensions and rising oil prices. The US Dollar is supported by strong labor data and energy market dynamics, while traders anticipate central bank actions and monitor upcoming economic releases. The market outlook is cautious, with stagflation concerns and technical resistance limiting upside potential.