British Pound to Dollar Forecast: 1.35 Resistance Caps GBP Gains

Modified: Friday, 10 April 2026 08:41 BST - Written by Toni Johnson

STORY LINK British Pound to Dollar Forecast: 1.35 Resistance Caps GBP Gains

The Pound to Dollar exchange rate (GBP/USD) failed to hold gains above 1.3480, retreating below 1.3400 as renewed uncertainty over the Iran ceasefire dented risk appetite.

While Sterling remains supported by underlying momentum, volatile energy prices and fragile geopolitical conditions continue to cap upside potential near the 1.35 level.

GBP/USD Forecasts: Unable to Hold 5-Week Highs

The Pound to Dollar (GBP/USD) exchange rate surged to highs just above 1.3480 on Wednesday, but failed to break through resistance levels and dipped back below 1.3400 before consolidating close to this level. Volatile trading will inevitably continue in the short term with markets monitoring energy prices and government bond markets.

According to UoB; “The upside risk remains intact, but GBP must close above 1.3480 before a move to 1.3520 can be expected.”

MUFG considers that UK vulnerability will cap GBP/USD around 1.35 this year.

Underlying uncertainty capped risk appetite on Thursday and the potential for GBP/USD gains.
The dollar overall recovered some losses despite a fragile tone while equities moved lower with no major domestic developments.

After euphoria triggered by the US-Iran 2-week cease-fire deal, there was a more sober attitude on Thursday. There were fears that on-going Israeli attacks on Lebanon would lead to the cease-fire breaking down and there was still a high degree of uncertainty over the extent of traffic through the Strait of Hormuz.

Brent crude also partially reversed losses to trade near $96 p/b which triggered fresh reservations over the economic outlook.

According to Danske Bank; “Iran and the US remain far apart on key issues, so a new escalation is likely. It also remains to be seen if shipments through the Strait of Hormuz start to pick up the coming days, which will be key for the oil market.”

ING noted; “Iran said yesterday that the ceasefire had been violated, helping the dollar recover a small portion of losses. That serves as a reminder that the situation remains highly uncertain and that small bouts of re‑escalation are still possible even if the conflict moves towards a broader resolution.”

The bank added; “Evidence that traffic through the Strait of Hormuz is picking up could add pressure on the dollar, but a more durable move would likely require signs that the ceasefire evolves towards a lasting arrangement. Otherwise, markets may start to grow nervous again once the two‑week ceasefire nears expiry.”

MUFG noted the potential for dollar gains; “The US dollar’s best prospect of appreciation remains a more pronounced period of risk aversion that sees a flight to the dollar.

Nevertheless, it added; “But the general more modest gains for the dollar through this conflict to date we believe is indicative of poor underlying fundamentals for the dollar that will reassert themselves again if we do see further de-escalation in the coming weeks.”

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TAGS: Pound Dollar Forecasts