Sterling rose more than 2% Monday to its strongest since its rebound high of 1.1493 on Oct.
5, taking it to the doorstep of major technical resistance after a rapid fiscal policy reversal from the British government nL8N31I1LM.
The huge risk premia assigned to UK assets before the government reversed its unfunded fiscal stimulus plans have all but been erased in 2-year gilts yields, down 33bp Monday.
Sterling now faces key resistance at 1.1497, the 50% Fibo of the 1.26665-1.0327 May-September plunge to record lows.
If it closes above 1.1500, the 61.8% Fibo at 1.1773 by July's 1.1761 low could be tested next.
Rebound attempts since Russia's invasion of Ukraine on Feb.
24 have all been thwarted by the daily Ichimoku cloud, now spanning 1.1707-1.1849.
While the BoE's intervention and the government's fiscal U-turn support sterling, bulls still face UK recession risks from the BoE hiking rates by another 3% to above 5% next year to deal with rampant inflation.
And households and businesses now face higher taxes and less enduring support with energy prices.
Moreover, UK political stability and leadership remain in question.
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