GBP/USD Struggles as Higher Yields and Political Risks Pressure Sterling

GBP/USD remains vulnerable despite higher global bond yields, and persistent inflation pressures continue to support the US dollar. While easing oil prices helped sterling recover slightly, markets remain focused on whether energy costs and yields will continue climbing, which could keep pressure on risk assets and the pound.

Political uncertainty in the UK is also weighing on sterling, with concerns growing around the country’s economic outlook and exposure to higher imported energy costs. At the same time, strong US inflation data and rising Treasury yields are reinforcing expectations that the Federal Reserve may keep interest rates higher for longer, further supporting the dollar.

Technically, GBP/USD has recovered from the 1.3300 area but upside remains limited while below resistance near 1.3400, followed by 50 & 200 DMA. On the downside, support levels are seen near 1.3180.

Overall, the near-term outlook still favors downside risks for GBP/USD unless global risk sentiment improves and bond yields begin to stabilize.

GBP/USD Daily Chart