GBPUSD:
Sterling stays under pressure after hitting multi-month lows as the market prices a gentler policy trajectory from the Bank of England, while the dollar is supported by steady US data. A further drag for the pound comes from the fiscal agenda: debates over tax measures and the need to close the budget gap raise concerns about UK growth prospects. These factors shift rate expectations toward earlier easing, reducing the appeal of UK assets.
On the dollar side, stable readings in US services activity and continued demand for safe assets amid equity-market volatility remain supportive. Treasury yields are relatively high, encouraging flows into the dollar and limiting pullbacks in the dollar index. As a result, the growth and policy differentials work against GBPUSD.
Over the next 24 hours, signals from US employment and services data—and commentary from UK officials on the budget and inflation outlook—will be pivotal. For now, the fundamental setup is unfavorable for the pound: fiscal uncertainty, soft activity trends, and BoE caution suggest a predominantly downside scenario for the pair.
Trading recommendation: SELL 1.3025, SL 1.3075, TP 1.2950
Origin: FreshForex
