• GBP/USD dipped on Thursday as investor caution over a fragile Middle East ceasefire weighed on sentiment, alongside growing concerns about the impact of rising energy costs on the UK economy.
• Inflation gauges in UK business surveys surged to record highs, signalling the Iran war’s impact is spreading across the economy.
• S&P Global’s flash UK Composite PMI showed input prices posted their largest monthly jump on record, reaching the highest level since late 2022’s double-digit inflation period.
• A separate CBI survey showed manufacturers’ price expectations surged at a record monthly pace, reaching the highest level in over three years.
• Investors on Thursday were fully pricing in two BoE rate hikes this year with the possibility of a third, doubling their bets from earlier in the week.
• Immediate resistance is located at 1.3532(38.2%ib), any close above will push the pair towards 1.3615(23.6%ib)
• Support is seen at 1.3464(50%fib) and break below could take the pair towards 1.3399(50%fib).
Recommendation: Good to sell around 1.3460 with stop loss of 1.3560 and target price of 1.3400
