FxWirePro: GBP/USD hovers near three week low, bearish outlook remains

• GBP/USD hovered near  three week   low as geopolitical volatility, divergent central bank trajectories, and persistent inflation concerns weighed on sentiment.

.• Iran and Israel said they halted attacks following a Trump appeal to “stop shooting,” though Iran warned it could resume strikes if Israel targets Hezbollah in Lebanon.

• On the domestic side, expectations for BoE rates have softened, with MPC members remaining cautious on further hikes.

• The recent MPC decision to hold rates was passed by an 8–1 vote, with one member backing a 25 bps hike to tackle persistent UK inflation, signalling that price pressures remain a live concern.

• BoE Governor Andrew Bailey noted in April that rising oil prices have exacerbated inflation expectations, flagging the need to watch for second-round effects before hiking rates.

•A further escalation in Middle East tensions could push oil prices higher, worsening already elevated UK inflation and potentially forcing the BoE toward a faster and steeper rate path.

•   Immediate resistance is located at 1.3325(38.2%fib), any close above will push the pair towards 1.3434(SMA 20)

•  Strong support is seen at 1.3303(Lower BB) and break below could take the pair towards 1.3176(23.6%fib).

  Recommendation: Good to sell around 1.3360, with stop loss of 1.3400 and target price of 1.3290