Technically, the overall momentum remains mixed. However, the short-term structure and momentum are currently favoring buyers. A successful defence of the 1.3180 zone could encourage buyers to re-enter the market. Conversely, a decisive break below support may trigger further downside pressure.
The currency pair remains above 1.32, as elevated energy costs and persistent inflation concerns reinforced expectations for UK interest rates to remain higher for longer. BoE policymaker Catherine Mann said on Tuesday that inflation above the Bank’s 2% target appeared to have become embedded in the economy.