Important events today:

17.12 07:00 UTC: GBP – Consumer Price Index

GBP/USD is trading around 1.3410. Overall uncertainty around US interest rates is restraining the dollar, while domestic risks for the pound are becoming more evident. UK labor market data point to cooling conditions: unemployment is rising and wage growth is slowing. This strengthens expectations that the Bank of England may move toward rate cuts in the coming months.

Even if the market has partially priced in the probability of such easing, any confirmation of a more dovish stance could limit demand for the pound. Investors are also closely watching fiscal and budgetary developments, as higher borrowing costs and weak consumer demand increase the currency’s sensitivity to news and data. The market prefers to reduce risk ahead of key central bank statements.

The picture for economic activity remains mixed. Purchasing managers’ indices (PMI) show moderate expansion, but growth momentum is limited. Against this backdrop, the pound becomes more vulnerable to strong US data and signals from the Bank of England, supporting a downside scenario for GBP/USD.

Recommendation: SELL 1.3410, SL 1.3430, TP 1.3320