GBPUSD:
The pound is trading near 1.3550 amid a weak dollar and expectations that the Bank of England will keep rates unchanged on September 18. The market highly values the likelihood of a pause, as wage growth and persistent “hard core” service inflation are keeping the regulator from easing anytime soon. This supports the interest rate differential in favor of the GBP against the dollar in the coming weeks.
The US, in turn, is providing additional tailwinds through growing signs of a weakening labor market and easing inflationary pressures in segments relevant to PCE. Risk appetite remains strong, which is combined with investor caution towards the long dollar ahead of the Fed meeting. Political and fiscal risks exist in the UK, but in the short term, they are secondary to the monetary agenda.
Based on the fundamental balance, the base scenario is to buy with careful money management: BUY 1.3555, SL 1.3515 (below the nearest macro news “risk threshold”), TP 1.3625 — provided that the Fed/BoE rhetoric remains moderately dovish and there are no surprises on inflation.
Trading recommendation: BUY 1.3555, SL 1.3515, TP 1.3625
