• GBP/USD dipped on Friday as escalating Middle East tensions and rising oil prices fueled inflation concerns, reinforcing expectations of further rate hikes by the Bank of England.
• Oil prices rose over 1% as the ongoing Iran conflict showed no signs of easing, with the U.S. preparing to deploy additional troops to the Middle East.
• UK fiscal concerns grew as February borrowing exceeded expectations, amid volatile debt costs and rising spending pressure linked to the Iran conflict
• The BoE held rates at 3.75%, but flagged inflation risks, with markets pricing in a ~70% chance of an April hike and up to three rate increases by year-end.
• Prior to the conflict, investors had expected the BoE to lower borrowing costs as early as Thursday's meeting.
• Immediate resistance is located at 1.3402 (SMA 20), any close above will push the pair towards 1.3449(38.2%fib)
• Support is seen at 1.3275(38.2%fib) and break below could take the pair towards 1.3200 (Lower BB).
Recommendation: Good to sell around 1.3340 with stop loss of 1.3490 and target price of 1.3270
