FxWirePro: GBP/USD relief rally faces a wall of macro, political headwinds

• GBP/USD   rebounded on Monday as reports of a temporary U.S. sanctions waiver for Iranian oil pressured the dollar lower.

• GBP/USD   may face continued short-term volatility, with lingering political uncertainty  and macroeconomic worries likely to limit gains after Monday’s rebound.

• Political uncertainty in the UK remains elevated ahead of Wednesday’s inflation report, which is likely to reinforce expectations for further Bank of England tightening despite slowing economic growth.

•UK political uncertainty has intensified amid speculation over a potential tax-and-spend Labour replacement for Keir Starmer and renewed debate over closer ties with the European Union.

•Meanwhile , Money markets show traders expect the Bank of England ⁠will need ​to raise interest rates at least twice this year , ​having priced in the prospect of around two cuts before the Iran war broke out in late February.

•   Immediate resistance is located at 1.3460(50%fib)), any close above will push the pair towards 1.3519(SMA 20)

•  Strong support is seen at 1.3304 (38.2%fib) and break below could take the pair towards 1.3180(pril 6th low).

  Recommendation: Good to sell  around 1.3470, with stop loss of 1.3560 and target price of 1.3400