Sterling Jumps Near March Highs as Oil Shock EasesGBP/USDTASTYFX:GBPUSDtastyfxGBP/USD rallied meaningfully throughout Monday as markets reacted to a sudden shift in the geopolitical backdrop, with reports of delayed U.S. strikes on Iranian energy infrastructure triggering a sharp drop in oil prices and a broader risk-on move. The decline in Brent oil eased immediate concerns about an energy-driven inflation spike in the U.K., a key vulnerability given its reliance on imported fuel. That shift improved the relative outlook for the U.K. economy and supported Sterling, while the U.S. Dollar softened as safe-haven liquidity demand unwound alongside stabilizing global sentiment. For the BOE, the move lower in energy prices introduces a new layer of uncertainty. Just days ago, the oil shock had raised the risk of renewed inflation and a more hawkish policy stance, but today’s reversal reopens the possibility that inflation pressures may prove less persistent. Policymakers are now left navigating a rapidly changing environment, balancing still-elevated price risks against a fragile growth backdrop. With the Federal Reserve maintaining a steady stance and the U.S. outlook holding firm, GBP/USD’s rally reflects a recalibration of relative risk rather than a fundamental shift in the longer-term policy divergence. In the above chart, GBP/USD is trying to climb back into the uptrend from the January and November 2025 lows. However, it has been ensnared by a cluster of moving averages, as each of the daily 50-, and 100 EMAs (exponential moving average) proved as resistance during today’s session – not dissimilar to how they’ve served as resistance throughout March. A move above 1.3483 would establish a new high for the month, signaling an end to the series of lower highs and lower lows since late January (and likewise produce the needed breach of the daily 50- and 100-EMAs). Until then, traders new to GBP/USD may see a range between 1.3217 and 1.3483 that is either a bear flag or a bottom (inverse head and shoulders on 1-hour and 4-hour timeframes) being carved out.