• GBP/USD recovered some ground on Friday as investor’s assessed Mideast Tensions and concerns over potential interest rate hikes amid the U.S.-Israeli war on Iran.
• Geopolitical tensions remain the dominant market driver, particularly the escalating conflict in the Middle East.
• Soaring energy prices have renewed inflation worries and prompted a sharp pullback from February when two Bank of England rate cuts were priced in.
•Money markets largely expect the Bank of England to leave interest rates unchanged for the rest of the year as the war drives up energy costs and raises the spectre of another inflation wave.
•Traders were also weighing the potential costs of fresh government support for energy bills after Prime Minister Keir Starmer said easing the cost-of-living strain was at the top of his mind.
• Immediate resistance is located at 1.3442(38.2%fib), any close above will push the pair towards 1.3500(SMA20).
• Strong support is seen at 1.3284 (23.6%fib ), and break below could take the pair towards 1.3255 (Lower BB).
Recommendation: Good to sell on around 1.3400with stop loss of 1.3500 and target price of 1.3300
