• GBP/USD slipped lower on Tuesday as dollar strengthened firmed renewed U.S.-Iran hostilities raised fears of inflation
• Renewed focus on the U.S.-Iran conflict pushed oil prices and inflation expectations higher, reinforcing expectations that the Federal Reserve could raise interest rates. September Fed hike odds remained near their post-Jackson Hole highs at around 68%..
• The dollar strengthened following hawkish Federal Reserve policy expectations spurred by Chair Kevin Warsh's comments at the Jackson Hole Symposium last week.
• Adding to the dollar bid is the rise in global yields after Japanese yields climbed above 3% for the first time in 30 years.
• Economic data on Tuesday painted a mixed picture. Britain's manufacturing activity in August expanded at its slowest pace since March while BOE data showed that lenders approved the fewest mortgages in July since January 2024..
• Immediate resistance is located at 1.3552(SMA 20), any close above will push the pair towards 1.3561(38.2%fib)
• Strong support is seen at 1.3483(50%fib) and break below could take the pair towards 1.3442(SMA 20).
Recommendation: Good to sell around 1.3530, with stop loss of 1.3600 and target price of 1.3400
