GBPUSD:
The pound remains under pressure due to softer domestic macro indicators and rising expectations of policy easing by the Bank of England. Markets discuss the possibility of a rate cut as early as November amid slowing inflation and signs of a cooling labor market. Even if the decision is delayed, the policy tone aimed at supporting the economy increases the bias toward a weaker currency.
Fiscal considerations add uncertainty: expectations of a tighter budget later this month narrow the space for consumer activity and investment. As a result, the risk premium on UK assets rises and investors favor dollar instruments, pulling the pair lower.
The US retains a yield advantage and receives support from the flow of data on employment and business activity. A stronger dollar, together with locally softer BoE expectations, forms a fundamental downward bias for GBPUSD in the near term.
Trading recommendation: SELL 1.3135, SL 1.3185, TP 1.3050
Origin: FreshForex
