GBP/USD:
The pound remains near local levels but is fundamentally vulnerable due to mixed signals from the UK economy: consumer demand and the labor market are showing signs of cooling, while business investment remains volatile. This limits the Bank of England’s ability to take an aggressive stance and caps sustained GBP rallies.
The comparison of monetary policy paths also works against the pound: even if the Fed pauses, the U.S. yield premium remains higher than in the UK, and global demand for dollar assets supports the USD during periods of increased uncertainty. Any weak UK releases are quickly priced in as a dovish shift in rate expectations, leading to GBP weakness.
Overall, the balance of risks is tilted to the downside: the lack of fresh pro-pound drivers, coupled with steady dollar demand, creates potential for a move toward 1.3450, where some participants may take profit on short positions.
Trading recommendation: SELL 1.3500, SL 1.3525, TP 1.3450
Origin: FreshForex
