GBPUSD is on verge of breaching support amid global flight into dollar

Following recent declines, the GBPUSD pair is now hovering near its March 13 opening price. Boiling tensions in the Middle East remain the primary source of pressure on the pound, as the ongoing turmoil has triggered a dramatic surge in oil prices and soaring demand for safe-haven assets.

Being a net energy importer, the UK finds itself in a precarious position. Experts at Oxford Economics warn that even a minor supply disruption could reignite inflation and darken the country’s economic outlook.

In response to this unfavorable scenario, markets have revised their expectations regarding the Bank of England’s (BoE) monetary path. By the end of February, traders predicted roughly two rate cuts this year; now they anticipate hikes with a probability of over 50% in 2026. This shift weighs heavily on GBP, as policy tightening amid sluggish economic conditions is a classic recipe for recession.

The US dollar, by contrast, is firing on all cylinders. Its safe-haven status, coupled with America's relative energy independence, is pushing the greenback toward fresh highs. The DXY index has recently climbed to levels not seen since last November. Meanwhile, a swift resolution to the Middle East crisis appears to be slipping further out of reach.

From a technical standpoint, we see a clear downtrend in GBPUSD. Both the Chaikin and Stochastic oscillators confirm this grim picture. The latter points to sustained selling pressure, while the former shows steady capital outflows. The price is now sitting near the psychologically important support level of 1.33000. However, this threshold is unlikely to hold back the tide for long.

Next week, the BoE is set to announce another interest rate decision, with no change widely expected. In theory, such an outcome could offer some support to the pound. Nevertheless, don’t rule out an active profit-taking phase after the central bank’s meeting.

Pay attention to the following trading plan:

Sell GBPUSD at the current price (1.33300). Place Take profit at 1.32200. Set Stop loss at 1.34300.

The forecast remains relevant between March 13 and March 20, 2026.