GBPUSD, DXY Price Outlook: Will Hormuz Inflation Risks Tigger a Breakout This Week?

Will Hormuz inflation risks trigger a breakout this week following the sharp surge in US CPI and escalating tensions between the US and Iran after a stalemate in weekend negotiations?

Key Market Drivers

US CPI y/y surged from 2.4% to 3.3% on Friday, marking the sharpest increase since 2025
Hormuz tensions are escalating, with the US ordering a naval blockade on Iran, triggering renewed Iranian threats targeting Gulf ports
Diverging narratives between the US and Iran regarding conflict resolution are likely to support short-term dollar strength and broader market weakness
Eurozone CPI was the first to signal inflationary pressures, rising back above 2%, reinforcing expectations for tighter monetary policy as elevated energy prices persist
UK CPI for March is due next week, currently near 3%, adding to inflation concerns amid what is one of the most significant energy shocks in recent history, supporting expectations for a more hawkish Bank of England alongside the ECB if tensions persist

From a Technical Angle

DXY Price Outlook: Weekly Time Frame – Log Scale

Source: Trading view

The DXY remains in a consolidation phase, caught between rising inflation expectations, driven by higher energy prices, and hopes that ceasefire negotiations could ease these pressures.

From a technical perspective, this is reflected in the 100.60 resistance and the 98.50–98 support zone.

Bullish Scenario

Price action suggests the formation of a double bottom pattern, with a descending neckline limiting upside attempts near the 100 level.

A confirmed close above 100.60 could open the path toward 101.80 and 104.60, extending downside pressure on major currencies and precious metals.

The bearish scenario is explained with the monthly time frame below

DXY Price Outlook: Monthly Time Frame – Log Scale

Source: Trading view

Alternative Scenario

A break below the 98 level would invalidate the double bottom structure, exposing the index to the 97–95 support range, aligned with the broader 2008–2026 uptrend. This zone remains critical in defining the longer-term directional bias for the dollar.

GBPUSD Price Outlook: Weekly Time Frame – Log Scale

Source: Trading view

Similar to EURUSD, GBPUSD may be forming a double top pattern, opposing the DXY’s potential double bottom. The pair is struggling below the July 2023–January 2026 resistance zone near 1.38, while consolidating above the 1.32–1.30 support range.

Bullish Scenario

A move above the 1.3480 high could support a push toward the 1.37–1.3780 zone. A sustained break above 1.38 would strengthen the broader outlook toward 1.40–1.42.

Bearish Scenario

A break below 1.30 could expose downside toward 1.29 and 1.25, where potential recovery interest may emerge.

With sentiment heavily driven by headlines, focusing on confirmed closes beyond long-term key levels remains essential to minimize noise and avoid bull and bear traps.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.