Key events today:

23.07 14:30 UTC: USD – Crude Oil Inventories data from the Department of Energy.

The pound is struggling to hold above 1.35, but fundamental factors are not in its favor. The rise in US CPI to 2.7% y/y has reinforced expectations that the Fed will delay its easing cycle, while weak GDP dynamics and a cooling labor market in the UK have reignited talks of a possible Bank of England rate cut as early as August.

Additional pressure comes from the political front: London is forced to balance between the US’s tough trade rhetoric and the need to ease tensions with the EU, adding to uncertainty for businesses. Meanwhile, capital inflows into high-yield US government bonds are weakening demand for UK assets.

The situation is further aggravated by the UK’s persistent current account deficit, which, in the context of a strengthening dollar, requires higher risk premiums to cover external needs. All this makes short-term selling attractive, with a tight stop above 1.3575.

Recommendation: SELL 1.3525, SL 1.3575, TP 1.3475.