• GBP/USD initially firmed but gave up ground on Tuesday as investors focused on a series of key UK economic releases this week.
• The UK economic calendar is packed this week, beginning with wage data on Tuesday. The figures will be closely watched for clues about underlying inflation pressures and the Bank of England’s policy outlook.
• UK inflation data is due Wednesday, with headline CPI expected to rise to 2.9% year-on-year. A stronger-than-expected reading could reinforce expectations for tighter BoE policy and provide further support to the pound, while a softer print could limit sterling’s recent gains.
• Geopolitical risks remain an important factor for GBP/USD, with Iran warning of further action in the Strait of Hormuz if diplomatic efforts with the U.S. fail.
• Stalled peace efforts and elevated tensions are keeping oil prices and inflation risks in focus, potentially complicating the outlook for both the BoE and Fed.
• Immediate resistance is located at 1.3561(38.2%fib), any close above will push the pair towards 1.3595(Higher BB)
• Strong support is seen at 1.3535(Daily low) and break below could take the pair towards 1.3479(50%fib).
Recommendation: Good to buy around 1.3520, with stop loss of 1.3430 and target price of 1.3590
