• GBP/USD moved back above 1.3450 in US session on Monday , recovering from heavy losses seen at the start of the week.
• The Middle East war has driven energy prices higher, boosting inflation concerns and raising fears over global growth, with Brent crude up about 8% above $102.50 per barrel on Monday.
• Higher energy prices have led markets to price in potential Bank of England rate hikes, though most brokerages do not expect any increase in 2026..
• BoE Governor Andrew Bailey said earlier this month that markets were getting ahead of themselves in pricing rate hikes.
• Money markets now price in nearly two rate hikes in 2026, a shift from earlier expectations of two BoE rate cuts this year before the war began.
• Immediate resistance is located at 1.3518(Higher BB), any close above will push the pair towards 1.3593(61.8%fib)
• Support is seen at 1.3414(50%fib) and break below could take the pair towards 1.3234(SMA 20).
Recommendation: Good to buy around 1.3460 with stop loss of 1.3400 and target price of 1.3530
