GBP/USD Daily Analysis 26/03/2026

The pound traded near $1.34 on Wednesday as investors reacted to weaker-than-expected PMI data and escalating tensions in the Middle East, increasing concerns about an energy shock. UK business activity growth slowed to its lowest level since September 2025, with the war in Iran dragging down growth and significantly pushing up inflation. Manufacturing cost growth accelerated at its fastest pace since “Black Wednesday” in 1992. Meanwhile, markets remain focused on developments in the war. US President Trump announced a five-day delay to planned strikes on Iranian energy infrastructure, claiming “positive negotiations” were underway, although Tehran denied this, reports suggest indirect talks are ongoing. The recent surge in energy prices has led investors to increase bets on policy tightening this year, with markets now expecting multiple rate hikes from the Bank of England, a stark contrast to the two rate cuts anticipated before the conflict.

The pound/dollar pair rebounded from near a three-month low, testing the key 200-day simple moving average supply zone at 1.3433. The pound/dollar pair spent most of the week consolidating on the downside, hovering near the near three-month low of 1.3218 reached a week ago. However, pound buyers attempted a modest rebound and re-entered the market in the latter half of the week. On the daily chart, the short-term bias for the pound/dollar is slightly bearish, as the spot price continues to hold below the 200-day simple moving average of 1.3433, keeping the pair's movement in the lower half of its trading range. The Relative Strength Index (RSI) is around 48, reinforcing the loss of bullish momentum rather than obvious selling pressure, indicating that sellers still have the upper hand, but the decline is showing a restrained rather than impulsive movement. Near-term support is at 1.3350 (9-day simple moving average), a break below which would expose 1.3300 (psychological level). Initial resistance is at the 200-day simple moving average at 1.3433, paving the way for a further challenge of 1.3480 (Monday's high).