GBP/USD at the Crossroads: Will Cable Break the 1.3437 Resistance?
By Zain Vawda | 12 March 2026 at 11:50 UTC
Market Overview
The US Dollar is currently exhibiting strength, bolstered by safe-haven flows amid ongoing geopolitical tensions and rising inflationary concerns. Expectations for US rate cuts have significantly decreased from 66 basis points (bps) to approximately 30 bps, primarily due to the potential impact of escalating oil prices on inflation.
Technical Analysis of GBP/USD
GBP/USD is experiencing a technical struggle, facing immediate resistance at the 100-day moving average (MA) of 1.34376. The pair has found support around the 1.3360 level, but a rally from earlier lows has encountered resistance at the 100-day MA as risk-off sentiment returns and the US Dollar strengthens.
As the US Dollar index retreats from a multi-month resistance level at 99.57, there is potential for GBP/USD to retest the 100-day MA and possibly approach the psychological level of 1.3500 if the Dollar continues to decline.
Influencing Factors
The fate of GBP/USD is closely tied to the performance of the US Dollar, which is influenced by overall risk sentiment and inflationary pressures. The recent surge in oil prices is expected to contribute to a potential 3% rise in headline inflation next month, further supporting the US Dollar as rate cut expectations diminish.
Financial markets are currently focused on the duration of geopolitical conflicts and the resulting supply shocks. Recent emergency measures to address oil supply disruptions may indicate a prolonged period of tension, affecting investor sentiment and market performance.
Technical Indicators
From a technical standpoint, GBP/USD is caught between a long-term downtrend and a significant horizontal support zone. The 100-period SMA currently acts as immediate resistance, while the 200-period SMA indicates a bearish medium-term trend. The RSI is at 51.20, suggesting a potential shift in momentum favoring bulls.
Trading Outlook
Bearish Case
If GBP/USD fails to break above the 100-period SMA (1.34376), a retest of the 1.33788 support level is expected. A break below the recent low of 1.33332 could lead to a decline towards 1.3250.
Bullish Case
A sustained move above 1.3450 would invalidate the immediate bearish structure, potentially leading to a test of the 200-period SMA near 1.3550.