GBPUSD:
Sterling remains under pressure around 1.34–1.35 following the Fed Chair’s emphasis on data dependence, which strengthened the dollar and tempered expectations for the pace of U.S. policy easing. For the pound this implies a less favorable yield differential in the near term and reduced currency appeal.
Domestically, recent U.K. business activity data pointed to weakness in both manufacturing and services. Against this backdrop, the Bank of England remains cautious and markets are revising the rate path, which also limits upside for the pound. Budget considerations and debates around public finances add to the risk premium on U.K. assets.
External factors — expectations around U.S. PCE and developments in global tariffs — amplify dollar fluctuations and, by extension, volatility in GBPUSD. As long as U.K. data do not show sustained improvement while U.S. indicators underpin the dollar, risks remain tilted to the downside for the pair.
Trade recommendation: SELL 1.3450, SL 1.3515, TP 1.3400
Origin: FreshForex
