The Pound's Challenge During Economic Uncertainty

The Pound Sterling (GBP) is facing challenges as it hovers around 1.2196 due to uncertainty regarding the UK's economic outlook. September's PMI data indicated vulnerabilities in the UK economy, with firms hesitating to use their full capacity and reducing hiring due to higher interest rates imposed by the Bank of England (BoE), which have dampened demand.

Investors are not expecting a swift recovery in UK demand as the BoE plans to maintain higher interest rates for an extended period to ensure price stability. BoE Deputy Governor Ben Broadbent predicts that inflation will decrease to 2% within two years, as the restrictive monetary policy has negatively affected the labor market and economic prospects.

GBP/USD is experiencing a similar price accumulation, with direction pending confirmation from NFP data. The next resistance level to watch is at 1.2300, and the support level is at 1.0050.

 

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2400	1.2300	1.2200	1.2110	1.2000	1.1900