Sterling Edges Higher Amid Fiscal Discipline and Upcoming Data
Sterling edged higher for a third session, with GBP/USD trading around the mid-1.3200s in Asia and staying within the range that has contained price action for roughly three weeks. The dollar remained under pressure as US Treasury yields eased from multi-year highs, while the UK Chancellor reiterated plans for strict fiscal discipline ahead of the Budget on 28 October. Attention now turns to the Chancellor’s remarks at the IMF and World Bank annual meetings in Bangkok, alongside speeches on Friday from the Bank of England Governor and the Federal Reserve Chair, plus the next UK monthly GDP report and the latest US inflation data.
Geopolitical Risks and Technical Outlook
Geopolitical risk continued to underpin the greenback, limiting downside in thin US holiday liquidity. Tensions rose after Iran’s top security official said Washington’s response to its proposal on reopening the Strait of Hormuz was insufficient, as President Donald Trump weighed renewed strikes against Tehran. Technically, the pair remains in what is described as bearish consolidation after the drop from the August swing high near 1.3675, and it is trading below the 100-period SMA on the four-hour chart. Resistance is seen near 1.3260 and then 1.3300, while bears are watching 1.3180 for a breakdown.
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