Us Data And Dollar Dynamics
US labour data showed softer conditions, with JOLTS vacancies falling from 7.24 million in January to 6.882 million in February. Hiring also weakened, down 3.1 percentage points to 3.4%, according to the US Department of Labor. UK GDP rose 0.1% in Q4 2025, matching estimates, and was up 1% year on year, unchanged, the ONS said. The OECD cut its UK growth forecast to 0.7% from 1.2% last week. Money markets priced 59 basis points of Bank of England tightening, while the CME FedWatch Tool pointed to the Fed holding rates. Key levels cited include resistance at 1.3282 and 1.3330, with support around 1.3180–1.3200, then 1.3100 and 1.3035. We are watching the developing situation in the Middle East, with Iran’s threats set to begin on April 1st. Typically, such geopolitical risk drives traders into the safety of the US Dollar. However, the market’s initial reaction has been limited, suggesting we are in a “wait and see” mode for now. While we saw weakness in the February 2026 JOLTS report, the more recent S&P Global Flash US Composite PMI for March showed a surprising rebound to 52.1, driven by the services sector. This conflicting data muddies the outlook for the Federal Reserve, supporting the view that they will likely remain on hold. The Dollar Index is reflecting this uncertainty, struggling to hold gains below the 100.00 level.Uk Inflation Risks And Gbp Usd Setup
In the UK, the stagflation risk is very real, with the economy having grown by only 0.1% in the final quarter of 2025. February’s inflation data, which came in higher than expected at 3.4%, reinforces the market’s pricing for 59 basis points of Bank of England rate hikes. This scenario is reminiscent of the energy price shocks we dealt with back in 2022, which squeezed both consumers and the economy. Given these opposing forces, implied volatility on GBP/USD options is likely to increase in the coming weeks. Traders should consider strategies that benefit from a sharp price move in either direction, such as buying straddles or strangles. This allows us to capitalize on the uncertainty around key support and resistance levels without betting on a specific direction. The technical chart shows GBP/USD is coiling within a tight range, creating clear levels for traders to watch. We see strong resistance near 1.3330, making this an attractive area to sell rallies or purchase puts. A decisive break below the 1.3180 support level would likely trigger further selling and could be a signal to add to short positions or buy downside protection. Create your live VT Markets account and start trading now.
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