• GBP/USD extended decline on Wednesday as the pound remained under pressure amid persistent concerns over the UK’s fiscal outlook.
• The upcoming Autumn Budget is expected to test Chancellor Rachel Reeves, as investors foresee tough measures ahead, including potential tax rises and reduced public expenditure.
• In the November 26 budget, Chancellor Reeves may unveil tax hikes, with possible increases on housing or property sales.
• The pound’s weakness has deepened as investors factor in softer inflation and potential rate cuts, adding to long-standing concerns over the UK budget.
• While a rate cut before the Autumn Statement remains unlikely, the Bank of England could still surprise with an easing move at its November meeting, given recent divisions within the MPC.
• Immediate resistance is located at 1.3281(38.2%fib), any close above will push the pair towards 1.3362(SMA 20)
• Strong support is seen at 1.3197(Lower BB) and break below could take the pair towards 1.3160(23.6%fib).
Recommendation: Good to sell around 1.3240 , with stop loss of 1.3300 and target price of 1.3160
