No major events are expected today.

GBP/USD is trading around 1.3390, with the pair’s dynamics largely driven by the US backdrop. Against the backdrop of resilient US economic data, the market is increasingly cautious about the prospects of an early rate cut, allowing the dollar to remain supported by bond yields and demand for liquidity. Investor sensitivity to news surrounding the Federal Reserve has also become an additional factor.

In the UK, by contrast, the debate around lowering borrowing costs is intensifying. Expectations of slowing inflation and a cooling labor market have already pushed government bond yields lower. Optimism regarding fiscal discipline supports the bond market, but at the same time increases the likelihood of a more accommodative policy stance. Investors are closely watching a series of UK releases on growth and prices.

If UK data come in weaker than expected, the market may more quickly price in a Bank of England rate cut, increasing pressure on the pound. At the same time, signs of persistent inflation in the US or rising global uncertainty would favor the dollar. Overall, the fundamental balance of factors currently points toward further downside in the pair.

Recommendations: SELL 1.3385, SL 1.3400, TP 1.3295