GBP/USD falls to a two-month low after the BoE holds and Burnham’s victory. Oil rises as US-Iran talks are cancelled, but oil still falls 9% this week.GBP/USD Falls to Two-Month Low After BoE Hold and Burnham VictoryGBP/USD has fallen to a two-month low following the Bank of England’s interest rate decision as investors also digest Andy Burnham’s victory in the Makerfield by-election.The Bank of England left rates unchanged at 3.75%, in line with expectations, saying it would be premature to tighten policy given the uncertainty surrounding the inflation outlook.Inflation data earlier this week was softer than expected, with CPI unchanged at 2.8% year-on-year in May. The Bank also lowered its 2026 inflation forecast to 3.2% from 3.6%, raising doubts over whether policymakers will need to raise rates at all this year.The BoE’s cautious stance contrasts with the ECB and the BOJ, which both raised rates recently, and also with the Federal Reserve’s hawkish tilt earlier this week.In addition to the monetary policy outlook, sterling investors are digesting Andy Burnham’s victory in the Macclesfield by-election, a result that could strengthen his position ahead of any future Labour leadership contest.Markets have previously expressed concerns that a Burnham-led government could favour higher public spending at a time when the UK’s fiscal position is already under scrutiny. Those concerns were reinforced by data showing public sector net borrowing rose to £23.3 billion in May, above expectations of £18.9 billion and around £7 billion ahead of the OBR’s forecast for the year to date.Gilt yields moved higher following the borrowing data and the election results. However, the reaction has been relatively contained after Burnham reiterated his commitment to the government’s fiscal rules. Further clarity around spending plans and growth policies could help reassure bond markets in the weeks ahead.Looking ahead, attention will turn to next week’s U.S. core PCE inflation data for further clues over whether the Federal Reserve could raise rates later this year.GBP/USD Forecast – Technical AnalysisGBP/USD has broken below its symmetrical triangle pattern, falling to support at 1.3200, a key 2026 low.For now, support is holding, but sellers will look for a break below 1.3200 to expose 1.3000, the late-2025 low.Any recovery would need to reclaim 1.3330, a key horizontal resistance level, before bringing the 200-day SMA at 1.3410 and the rising trendline resistance into focus. Above here, the 50-day SMA at 1.3465 comes into view, followed by 1.3500, the late-May swing high.Oil Tests Key Support After a 9% Fall This WeekCrude oil is rising back above $77 per barrel on Friday amid growing concerns over the durability of the U.S.-Iran peace process, raising questions over whether the reopening of the Strait of Hormuz will be sustained.Planned talks between the U.S. and Iran in Switzerland were cancelled, according to the Swiss Foreign Ministry, while Israel continued strikes against Hezbollah targets in Lebanon.Even so, oil remains on track for weekly losses of around 9% as investors continue to price in the reopening of the Strait of Hormuz and improving supply conditions.Tankers carrying previously stranded crude have begun leaving the waterway, while Kuwait has announced plans to increase production.Markets will continue to monitor developments surrounding the U.S.-Iran truce and the 60-day window for negotiations over Iran’s nuclear programme.Oil Forecast – Technical AnalysisOil has broken below its symmetrical triangle pattern and fallen to support at the 200-day SMA.Sellers will need to break below $73.75 to extend the bearish move towards $70, which marks both the 78.6% Fibonacci retracement of the $55-$120 move and a key psychological level. A break below $70 could expose $65.Should support hold, buyers will look for a recovery towards $80, the 61.8% Fibonacci retracement and an area close to the April low. Above here, $88 becomes the next upside target, marking the 50% Fibonacci retracement level.Original Post