**GBP/USD Price Forecast: Pound Steadies as Markets Await UK Budget**
*By Trading News Staff – Original Article Source: [tradingnews.com](https://www.tradingnews.com/news/gbp-usd-price-forecast-pound-steadies-markets-await-uk-budget)*
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**Summary**
– The British pound (GBP) steadied against the US dollar (USD) in early trading, as foreign exchange markets brace for critical signals from the upcoming UK budget.
– Market participants are weighing economic data, fiscal policy prospects, and central bank guidance as key factors in GBP/USD movements.
– Investors await new commentary from Chancellor Jeremy Hunt, who is set to reveal fiscal plans that could influence the outlook for both sterling and UK asset markets.
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**Market Review: Pound Holds Ground Ahead of Budget Statement**
The GBP/USD currency pair witnessed guarded trading sessions ahead of the highly anticipated UK budget announcement. After a period of volatility spurred by fluctuating US economic indicators and shifting risk sentiment, the pound stabilized above the 1.26 mark as markets seek clarity on the UK’s fiscal direction and broader economic strategy.
**Key Recent Drivers of GBP/USD Movements**
– US inflation data and Federal Reserve policy outlook continue to drive volatility in the FX market, affecting dollar strength globally.
– UK economic data has presented a mixed picture, with robust employment figures counterbalanced by sluggish consumer activity and ongoing concerns about inflation persistence.
– The Bank of England’s cautious stance on rate cuts contrasts with market speculation about the US Federal Reserve’s timeline for potential easing.
**Insider Insight**
Key analysts suggest that the upcoming UK budget will be a pivotal event, particularly as markets try to assess the impact of potential tax cuts, government spending priorities, and any measures targeted at stimulating economic growth amid a challenging environment.
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**Pound Underpinning: Fiscal Policy in Focus**
The British pound drew some support from speculation that UK Chancellor Jeremy Hunt may announce a package of targeted tax relief, aimed at supporting both households and businesses. The fiscal statement is being billed as the “last roll of the dice” for the Conservative government to shore up public support ahead of this year’s general election.
**Market Anticipations for the UK Budget**
– Potential income tax threshold adjustments to alleviate the impact of persistent inflation on household budgets.
– Investment in public services and green technology sectors to spur economic activity and long-term growth.
– Announcements concerning government borrowing and spending restraint to maintain investor confidence in UK sovereign assets.
– Measures that might address the UK’s chronic productivity puzzle and falling investment levels.
The balancing act for Chancellor Hunt lies in pledging fresh support for the economy while avoiding policies that could reignite inflationary pressures or unsettle global investors wary of unsustainable fiscal deficits.
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**Risk Appetite and Sentiment Analysis**
Currency strategists point out that UK assets often respond sharply to fiscal headlines. The pound’s recent resilience can be attributed to:
– Short-covering after prior bouts of selling.
– Hopes for stability and pragmatic policy, as signaled by recent government briefings.
– A perception among some investors that the UK economy, while sluggish, may avoid outright recession in 2024, especially if fiscal support is judiciously calibrated.
With global risk appetite remaining choppy, large institutional investors are likely to remain cautious around GBP/USD, pending clarity from both the Treasury and the Bank of England.
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**Technical Analysis: GBP/USD Levels to Watch**
Technically, GBP/USD has established a near-term support zone around 1.2600, with resistance clustered toward 1.2800.
**Notable Chart Patterns and Technical Markers**
– Support at the 50-day moving average, suggesting orderly conditions for now.
– Weakness below 1.2550 could expose GBP to further losses, with 1.2500 and 1.2430 as subsequent downside targets.
– To the upside, sustained breaks above 1.2700 may entice bullish momentum, with 1
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