Key Events Today:

10/07 14:00 UTC: USD – Trade Balance.

The Pound maintains its own support driven by expectations of a tighter Bank of England policy and the government’s focus on fiscal discipline. Its strengthening against the Euro demonstrates that European debt issues impact currencies unevenly. However, an advantage over the Euro does not equate to the same advantage over the Dollar: for GBP/USD, the comparison of interest rate prospects and the relative health of both economies remains primary.

The US services sector continues to expand despite the slowdown in the September ISM index. Rising input prices indicate that labor market cooling has not yet eliminated inflationary risks. This allows the market to sustain expectations of further Fed rate hikes, even if the next move is delayed, supporting Dollar demand through high yields on US assets.

Today’s UK Construction PMI will serve as a test of domestic activity’s resilience. Strong figures could reinforce support for the Pound, whereas a weak result would highlight the burden of high interest rates on the economy. Given the current Dollar momentum, local arguments remain insufficient for a sustained rally in GBP/USD. The short-side thesis maintains the advantage, although Bank of England support limits the downside potential.

Recommendations: SELL 1.3215, SL 1.3250, TP 1.3145.