Pound to Dollar Prediction: 1.34 Resistance Holds as USD Firms

Modified: Wednesday, 25 March 2026 09:46 BST - Written by Tim Boyer

STORY LINK Pound to Dollar Prediction: 1.34 Resistance Holds as USD Firms

The Pound to Dollar exchange rate (GBP/USD) failed to hold gains above 1.34, retreating after a volatile spike to 1.3480 as ongoing Middle East tensions and elevated oil prices kept markets on edge.

Despite brief optimism over potential de-escalation, renewed uncertainty and firmer energy prices have sustained demand for the US dollar, leaving Sterling vulnerable to further range-bound trading.

GBP/USD Forecasts: Unable to Hold Gains

After very volatile trading on Monday with the Pound to Dollar (GBP/USD) exchange rate spiking to highs at 1.3480, the pair has consolidated below 1.3400 on Tuesday with selling interest close to this level.

Middle East developments continued to dominate with relatively limited impact from the US and UK data.

MUFG commented; “We continue to hope that the risk of a bigger energy price spike will keep pressure on all parties to continue to de-escalate. While the conflict and energy supply disruption continues, foreign exchange markets are likely to remain volatile.”

UoB is still backing range trading at this stage; “Although GBP subsequently tested the upper end of our expected range with a high of 1.3480, the increase in upward momentum is not sufficient to indicate a sustained advance.”

Scotiabank considers that Monday’s price action was important; “Short-term price action has confirmed a bullish reversal and a rising trend from the March 13 lows.

Near-term resistance is at 1.3450, and we look to a short-term range bound between 1.3350 and 1.3450.”

Danske Bank forecasts that GBP/USD will decline to 1.29 on a 3-month view due to dollar strength before a rebound to 1.39 on a 12-month view.

GBP/USD spiked higher following comments by President Trump that a deal was possible on Iran with a slide in oil prices and dollar retreat. The tone was more sober on Tuesday as Iran denied that talks had taken place and the US described the situation as fluid.

There was renewed upward pressure on oil prices on Tuesday with Brent trading just above the $100 p/b level while equities were in the red.

National Australia Bank ‌currency strategist Rodrigo Catril noted; “Trump's comments were giving a breather to volatility at least, but it's difficult to see that this is going to trigger a risk-on trend."

Rabobank commented; “Further escalation has been averted for now, but don’t forget that Iran does not need to escalate. Iran continues to have full control over the Strait of Hormuz.”

ING notes pressure on the US; “The fact that the dollar has stayed soft over the last 24 hours probably represents the view that Washington is increasingly looking for an off-ramp to this crisis.

The Strait of Hormuz remains shut and despite the US being a net energy exporter, US gasoline prices have surged 30% to near $4.00 per gallon, the S&P 500 is off 5%, and US ten-year government borrowing costs are up 40bp.

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TAGS: Pound Dollar Forecasts