• GBP/USD hit three month low on Friday following data showing the UK economy stagnated unexpectedly in January.
• Weak activity and persistently high inflation expectations have raised stagflation fears as Middle East tensions push energy prices higher, weighing on growth while fueling price pressures.
• Britain’s economy unexpectedly stalled in January, while long-term inflation expectations remained elevated.
• ONS data showed Britain’s economy stalled in January, with flat GDP, weak services and rising energy‑price risks from the Iran conflict, deepening investor worries.
• Market participants are increasingly adding to short positions as the currency’s yield advantage evaporates.
• Immediate resistance is located at 1.3412(50%fib), any close above will push the pair towards 1.345(SMA 20)
• Support is seen at 1.3228(38.2%fib) and break below could take the pair towards 1.3012(23.6%fib).
Recommendation: Good to sell around 1.3280 with stop loss of 1.3370 and target price of 1.3200
