• GBP/USD fell to a three-month low Tuesday as surging energy prices revived inflation fears and reduced expectations of rate cuts.
• Fresh risk aversion added to existing pressure on sterling, which was already weighed down by concerns over the UK’s economic outlook and domestic political uncertainty.
• Meanwhile, U.K. Chancellor Rachel Reeves said she would guide the economy through Middle East-driven volatility, signaling closer EU ties and pledging stability for businesses..
In her budget update, U.K. Chancellor Rachel Reeves warned that the Middle East conflict and rising energy prices pose significant inflation risks to Britain’s economy.
• Immediate resistance is located at 1.3410(38.2%fib), any close above will push the pair towards 1.3538(50%fib
• Support is seen at 1.3255(23.6%fib) and break below could take the pair towards 1.3185(Dec 2nd low).
Recommendation: Good to sell around 1.3320 with stop loss of 1.3400 and target price of 1.3250
