GBP/USD was little changed as markets waited for UK labour data, Wednesday’s Consumer Price Index and next week’s budget. Attention has also turned to expectations that Chancellor Healey will keep fiscal policy disciplined on spending and borrowing, a stance seen as supportive for Gilts. The pair has been trading sideways since April, leaving spot in a holding pattern ahead of the domestic releases.
Technical Outlook for GBP/USD
On the charts, the pound has posted a bullish weekly reversal from the lower end of that range, following gains from Wednesday’s post-US CPI low. Follow-through demand has so far been limited, but the size of the rebound has shifted focus back to the top of the band. The move leaves scope for a retest of 1.3650/75 over the coming weeks, while initial resistance is flagged at the 200-day moving average near 1.3435.
