• GBP/USD extended its decline to a three-month low as renewed concerns over interest rates, oil prices and persistent inflation pressured the pound..
• Concerns over a drawn-out Middle East conflict mounted, with investors fearing oil prices could stay above $100 a barrel and force higher borrowing costs..
• Energy-importing economies with already strained public finances faced particularly strong pressure.
• On the data front, UK house prices recorded their weakest annual growth since December 2025, highlighting the impact of higher borrowing costs..
• BoE rate-setter Catherine Mann said the central bank’s response to the Middle East war shock had pushed up UK borrowing costs, offering little reassurance to policymakers.
•Traders are currently pricing in a 85% chance that the Bank of England will increase borrowing costs at its November meeting,
• Immediate resistance is located at 1.3305(38.2%fib), any close above will push the pair towards 1.3385(SMA 20)
• Strong support is seen at 1.3164(23.6%fib) and break below could take the pair towards 1.3138(Lower BB).
Recommendation: Good to sell around 1.3200, with stop loss of 1.3270 and target price of 1.3120
