GBPUSD:
The pound is holding near 1.34–1.35, but the fundamental balance remains fragile. The Bank of England has eased policy in recent months and maintains a cautious stance amid cooling domestic demand and stabilizing inflation. The regulator’s rhetoric and market expectations leave room for an additional rate cut if growth and credit data soften, which caps the pound’s upside potential.
The UK fiscal agenda adds uncertainty: the need to meet fiscal rules amid moderate growth complicates the government’s task and increases the economy’s sensitivity to further tightening in financial conditions on capital markets. The current-account position and reliance on external financing make the pound’s exchange rate sensitive to swings in the global dollar and the risk premium.
On the U.S. side, a likely Fed rate cut in October could weaken the dollar, but in the short term the U.S. budget story and swings in risk appetite keep demand for dollar liquidity elevated. In this setup we see increased risk of a pullback in the pound toward 1.3350, especially if UK data come in soft.
Trading recommendation: SELL 1.3450, SL 1.3500, TP 1.3350
Origin: FreshForex
