• GBP/USD eased on Tuesday as concerns about British politics and the path of Bank of England monetary policy weighed on pound.
British Prime Minister Keir Starmer dismissed calls to step down, including from his party’s Scottish leader, and pledged to continue leading after his appointment of Peter Mandelson as U.S. ambassador triggered a political storm..
• Pressure is building on him following the appointment of an individual whose ties to the late U.S. sex offender Jeffrey Epstein have sparked controversy and public criticism.
• Growing speculation among economists suggests that while Starmer may continue leading the Labour Party, his position as Prime Minister through year-end remains in doubt.
•On the data front, a batch of important UK economic data due this week, including fourth-quarter GDP, December trade balance figures, and industrial and manufacturing output reports.
• Immediate resistance is located at 1.3702(38.2%fib), any close above will push the pair towards 1.3810(Jan 30th high)
• Strong support is seen at 1.3559(SMA20) and break below could take the pair towards 1.3575(50% fib).
Recommendation: Good to buy around 1.3630 with stop loss of 1.3560 and target price of 1.3730
