Figure: GBPCHF, Time frame: H4, Source: TradingviewFigure: GBPCHF, Time frame: H4, Source: Tradingview

The British pound has been receiving notable support from strong UK economic data, particularly GDP growth and improving labor market conditions. However, this comes alongside domestic political challenges, highlighted by the ruling party’s recent losses in local elections, which could limit the continuation of this positive momentum for the British currency in the coming period.

At the same time, elevated inflation remains a supportive factor for sterling, as it may push the Bank of England toward adopting a more hawkish monetary policy stance and becoming more open to further interest rate hikes in an effort to contain inflationary pressures.

 The British pound has also strengthened against several currencies, most notably the Swiss franc, with the trend shifting from bearish to bullish following this rally as per the chart above. Price may witness a correction toward the green-marked demand zone around the 1.04885 and 1.04803 levels before resuming its upward movement toward the 1.05363 level or the descending resistance trendline. The bullish short- to medium-term scenario would be invalidated if price falls to 1.04699 and records a lower low below that level according to technical analysts.