GBPUSD:
The pound is under pressure after September inflation in the UK held at 3.8% y/y, below expectations for an acceleration. This intensified market debate about a possible rate cut by the Bank of England by year-end, shifted the yield differential further in favor of the dollar, and kept the pair around 1.33–1.34.
On the US side, the strong-dollar bias is supported by expectations for US inflation data and resilient Treasury yields. With weak domestic price pressures in the UK and lingering uncertainty around fiscal priorities, demand for GBP is limited, while the USD benefits from global demand for liquidity and reliability.
Moreover, any positive momentum for the pound fades quickly in the absence of firm evidence of UK economic acceleration; in October, upside attempts were constrained by the news backdrop and a comparatively strong dollar. As of today, fundamental arguments still favor selling into strength.
Trading recommendation: SELL 1.3350, SL 1.3370, TP 1.3290
Origin: FreshForex
