GBPUSD:
Sterling is restrained amid uncertainty around the UK’s budget trajectory and the assessment of consumer-demand resilience. The market soberly weighs risks to real incomes and inflation expectations, which limits room for rapid tightening of financial conditions and increases the pound’s sensitivity to the external backdrop.
The external agenda—swings in risk appetite and US trade-policy debates—supports demand for the dollar while cooling demand for higher-beta currencies. The US–UK yield spread remains notable, and the UK gilt market sends mixed signals: investor interest is uneven across durations, which does not add stability to the pound.
Under these conditions, a sell-on-rallies stance remains justified until there is convincing improvement in UK inflation and labor-market data and a reduction in geopolitical risks. Upside risks to the call include unexpectedly positive budget news or strong household-spending data, but the base case still favors the dollar.
Trade recommendation: SELL 1.3350, SL 1.3450, TP 1.3250
Origin: FreshForex
