GBP/USD Price Forecast: Sterling Stuck Above 1.35 as Inflation and War Signals Clash

Quick overview

GBP/USD is holding firm just above 1.3500 with trading activity in the 1.3520 to 1.3540 range as European trade opens on April 20, 2026. Despite a mixed bag of UK data, the pair has managed to maintain its gains over the past few sessions

Key Drivers Today

• Mixed UK Inflation Data comes in pretty much as predicted : March’s CPI came in at 3.3% year on year (on target) and 0.7% month on month (a hair above the forecast 0.6% ). Core CPI held steady. This data suggests that inflationary pressures are still very much in play which means the BoE is likely to keep tightening up as expected(all in all markets are now pricing in around three 25bps hikes for 2026, maybe starting soon).
• Geopolitical relief is starting to ease the pressure : President Trump’s surprise decision to extend the ceasefire with Iran has taken some of the heat off and boosted risk appetites which is weighing on the value of the dollar. However we still have some uncertainty in the area – Iran has refused to attend peace talks unless the naval blockade is lifted – so we’re still not out of the woods just yet.
• Dollar weakness is helping the pound hold its own : The fact that the Fed looks like it’s going to keep rates on hold for a bit longer has led to some renewed optimism and a further boost to the pound.

All being well in the Middle East, however, could see the pound push on towards 1.36, but any renewed tensions could have the opposite effect and send the dollar soaring.

Technical Analysis

On the 4 hour chart, GBP/USD is pretty much stuck in a tight range just below 1.3500, still holding above a trendline and the 0.5 Fib level (1.3490). This zone is acting as a bit of a pivot after the recent pullback from that high of 1.3590.

At the moment price is sort of sandwiched between:

• The support cluster of 1.3490 (the 0.5 Fib ) the trendline and the 50 day moving average
• Resistance zone of 1.3548 to 1.3590 (the 0.236 Fib and the recent highs)

The structure still looks pretty good for the buyers since the higher lows are still intact and price is still holding above the 200 day moving average at 1.3420, but to be honest the momentum has started to fade a bit. RSI is hovering around 45 to 50 which suggests that we’re in a period of consolidation rather than a clear trend.

Key Levels:

• Resistance: 1.3548 to 1.3590 to 1.3640
• Support: 1.3490 to 1.3465 to 1.3420

Trade Idea: If you want to buy, look to go long above 1.3550 targeting 1.3640, and set your stop loss below 1.3490.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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