• GBP/USD retreated slightly on Thursday as invested assessed fiscal tightening announced in the budget on Wednesday will actually be implemented.
• A day after unveiling plans for an additional £26 billion ($34 billion) in tax increases on top of the £40 billion announced in her first budget last year Rachel Reeves faced scrutiny over her decision to lift restrictions on child benefits for low-income families with more than two children.
• Overnight budget assessments revealed that higher public expenditure will take effect rapidly, while most of the tax burden will be pushed into future years.
• The development also fueled skepticism about whether the ruling administration would stick to higher taxes as the next election approaches.
• Immediate resistance is located at 1.3277( Higher BB), any close above will push the pair towards 1.3318(50%fib)
• Strong support is seen at 1.3179(38.2%fib) and break below could take the pair towards 1.3136(SMA 20).
Recommendation: Good to buy around 1.3230, with stop loss of 1.3130 and target price of 1.3300
