Key events for today:

18.03 12:30 UTC: USD – Producer Price Index.

18.03 18:00 UTC: USD – FOMC interest rate decision.

GBP/USD is trading near 1.3360–1.3370, but the pound lacks a clear advantage. The British currency has recently outperformed many European peers, as markets revised expectations for the Bank of England’s rate path and became more cautious about pricing in cuts. However, this has not been enough against the dollar: the US currency remains supported ahead of the Federal Reserve decision, while demand for safe-haven assets stays elevated amid geopolitical tensions and high energy prices.

The domestic backdrop for the pound is also mixed. Recent UK data showed economic growth stalled in January, increasing concerns about slowing business activity. At the same time, rising oil prices add inflation risks, leaving the Bank of England with less room to ease policy, while weak growth limits the scope for tightening. This creates a challenging environment for the pound.

Therefore, GBP/USD dynamics are currently driven more by the dollar than by the pound’s own strengths. If the Fed maintains a hawkish tone and highlights persistent inflation risks, the market may shift further in favor of the dollar. In that case, current levels in GBP/USD look attractive for selling, as the pair lacks strong fundamentals for a sustained move above recent highs.

Recommendations: SELL 1.3365, SL 1.3395, TP 1.3275