GBP/USD Under Pressure at 1.3400: Will UK PMI Data Save the Sterling from Geopolitical Heat?

Quick overview

The British Pound is facing challenges in the March 24, 2026, European trading session. GBP/USD has stayed weak near 1.3400. Although it briefly recovered to 1.3413 after dropping to 1.3380 earlier, overall sentiment is still negative due to the growing crisis in the Middle East.

As investors seek safety in the US Dollar, the Pound is under pressure from both a firm Federal Reserve and weaker expectations for the UK economy.

The main reason for the recent drop is the growing conflict between the US, Israel, and Iran. While there were brief hopes for a diplomatic solution, the situation has become more tense, making investors more cautious and putting extra pressure on the Pound.

Safe-Haven Dollar Surges as Middle East Tensions Boil Over

Market sentiment worsened after the Wall Street Journal reported that US-allied Gulf countries might become involved in the conflict. The possibility of Saudi Arabia taking military action has affected both energy and currency markets.

• Broken Ceasefire Hopes: Ceasefire hopes have faded. President Donald Trump suggested there were “productive talks” with Tehran, but Iranian officials, including Abbas Araghchi, have denied this.
• Retaliatory Cycles: Recent Israeli strikes on Iranian assets led senior military adviser Mohsen Rezaei to promise that the conflict will continue until Iran receives full compensation for damages.
• Flight to Quality: These ongoing tensions have caused many investors to move their money into the US Dollar, leaving riskier currencies like the Pound behind.

GBP/USD Technical Outlook: The 1.3450 Ceiling and the Descending Trendline

Looking at the charts, GBP/USD is struggling to break above resistance. On the 2-hour chart, it trades near 1.3372 after being pushed back from the supply zone between 1.3450 and 1.3480. A downward trendline has stopped every major rally since February.

• Pivot Zone: The price is moving around the 50 and 200-period moving averages near 1.3360 to 1.3365. This area will be important for the rest of the session.
• The Bullish Case: For buyers, holding the 1.3353 support level is key to keeping a possible move back to 1.3458 in play. If the price breaks above the trendline, it could move up to 1.3520.
• The Bearish Case: If the price falls below the pivot zone, GBP/USD could drop to 1.3307. A further decline toward the 1.3256 support level is also likely.

The RSI at 52 signals a neutral market, suggesting that the next big move will likely be triggered by a fundamental data release rather than technical exhaustion.

All Eyes on March PMI: A Decider for the Bank of England

The next move for the Pound depends on the upcoming S&P Global Flash PMI data for March. These numbers are viewed as a key test of how well the UK economy is handling global energy shocks.

Markets expect economic activity to slow down a bit. If the data is weaker than expected, the Bank of England may become less likely to raise interest rates. On the other hand, stronger results in the services sector could help GBP/USD try to break above the 1.3458 resistance level.

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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