GBP\/USD fell about 0.25% on Thursday to near 1.3525, giving back part of the earlier rise after a move towards 1.3600. The pair slipped below 1.3550 and traded lower through the European and North American sessions.<\/p>\n
UK data were mixed. GDP rose 0.5% month-on-month in February versus 0.1% expected, and the Index of Services rose 0.5% versus 0.3% expected.<\/p>\n
Manufacturing Production fell 0.1% month-on-month and 0.5% year-on-year, missing forecasts. Industrial Production year-on-year was -0.4% versus a -0.9% consensus.<\/p>\n
US Dollar demand was supported by ongoing uncertainty around the Iran conflict that began with US-led strikes at the end of February. Claims of a near Iran deal and an Israel-Lebanon ceasefire were met with doubt.<\/p>\n
The Strait of Hormuz remained closed and now includes a US-backed blockade, raising concerns about energy supply disruption and inflation. A Bank of England speaker, Taylor, was scheduled to speak twice later in the day.<\/p>\n
Short-term readings placed GBP\/USD near 1.3525, below the day\u2019s open at 1.3571, with Stochastic RSI at 46.19. Levels cited included support at 1.3520 and 1.3500, and resistance at 1.3571.<\/p>\n
On daily charts, GBP\/USD was near 1.3526, above the 50-day EMA at 1.3412 and the 200-day EMA at 1.3354, with Stochastic RSI at 94.6. The report noted support at those moving averages and included a disclosure that AI helped write the technical section.<\/p>\n
Given the conflicting signals, we should prepare for an increase in volatility in the GBP\/USD pair. The dollar’s strength from geopolitical risk is clashing with a UK economy showing pockets of strength, creating an uncertain environment. Options strategies that benefit from price swings, such as long straddles, could be worth considering to trade this choppy outlook.<\/p>\n
The continued closure of the Strait of Hormuz is the most significant factor supporting the US dollar right now. Historically, about 20% of the world’s daily oil supply passes through this chokepoint, so a sustained blockade presents a serious threat of renewed global inflation. This situation will likely keep safe-haven demand for the dollar elevated in the coming weeks.<\/p>\n
We remember well how the energy price shocks of 2022 led to persistent inflation that forced central banks into aggressive tightening cycles. Traders will be watching for any signs that history is repeating, which would reinforce the dollar’s strength and put pressure on other currencies. This historical precedent makes the current market skepticism toward a quick resolution in the Middle East understandable.<\/p>\n
On the UK side, the weak manufacturing report is a point of concern, offsetting the better-than-expected GDP print. This softness in the factory sector is a notable reversal, particularly after we saw the UK Manufacturing PMI finally climb back above the 50.0 growth threshold in late 2025. This divergence adds to the uncertainty surrounding the Bank of England’s policy path.<\/p>\n
For those expecting further downside, buying GBP\/USD put options with a strike price near 1.3450 could offer a defined-risk way to target a drop toward the 50-day moving average around 1.3412. This strategy would capitalize on both the strong dollar trend and the fresh doubts about the UK’s industrial health. The pair’s failure to hold gains above 1.3570 suggests sellers remain in control for now.<\/p>\n
However, we must also respect that the longer-term trend for GBP\/USD remains positive, with the price holding above key moving averages. For traders who view this dip as a corrective pullback, selling out-of-the-money puts near the 1.3400 psychological level could be a viable strategy. This approach allows one to collect premium while waiting for the broader uptrend to potentially resume.<\/p>\n
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