GBP/USD rose on Thursday but came well off its highs, with upside limited and a breakdown closer to 2020's 1.1413 pandemic lows more likely.
Sterling's 1.1718 August low on Tuesday breached July's 1.1761 trend low, but held the 100% Fibo-projected target off Aug.
1-5 drop at 1.1717.
That match suggests the broader 161.8% Fibo target at 1.1539 -- by the base of a three-month falling channel -- is likely to be reached.
Resistance is at Tuesday's high and the 38.2% Fibo of August's drop at 1.18775/805, followed by the 50% Fibo at 1.1931, should Friday's Fed events temporarily dim the dollar.
Sterling's slid this week to its lowest since March 2020's pandemic plunge depths even as 2-year gilt-Treasury yield spreads rose up to 86bp from August's lows with sky-high UK inflation expectations outweighing the yield benefits.
While the BoE's current policy rate peak is priced at 4.18% next year -- above Fed funds ceiling seen at 3.75% -- UK inflation is projected to remain several percentage points above the U.S.
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