GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD faces resistance at $1.30832 and must break above the 50-day EMA at $1.30726 to maintain a bullish trend.
- RSI at 50 indicates neutral market sentiment, leaving room for further directional movement.
- Key support at $1.30217 could trigger a bearish move if breached.
GBP/USD is trading at $1.30658, up 0.01%, reflecting a neutral yet slightly bullish tone. The pair is currently hovering around the pivot point at $1.30509, which could serve as a crucial level for the next directional move. Immediate resistance stands at $1.30832, followed by higher levels at $1.31051 and $1.31329. A break above these levels could signal more upside potential for the pound, possibly driving it towards $1.31329.
On the downside, the first line of defense is at $1.30217, with additional support at $1.29945 and $1.29659. A drop below $1.30217 could trigger a more bearish sentiment, testing the lower levels, especially if the pound fails to hold above the pivot point.
The 50-day Exponential Moving Average (EMA) sits at $1.30726, serving as a critical resistance level. A failure to break above this EMA could indicate some consolidation, with the pair needing a stronger push to continue the uptrend. The Relative Strength Index (RSI) is currently at 50, reflecting neutral momentum and signaling that the market could swing either way depending on key developments in the coming sessions.
A buying opportunity presents itself above $1.30399, with a target to take profit at $1.31049. Traders should be cautious of downside risks, placing a stop-loss at $1.30085 to mitigate any potential losses from a reversal.
GBP/USD - Trade Ideas
Entry Price – Buy Above 1.30399
Take Profit – 1.31049
Stop Loss – 1.30085
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$650/ -$314
Profit & Loss Per Mini Lot = +$65/ -$31
GBP/USD Price Analysis – Oct 14, 2024
Daily Price Outlook
During the early European session on Monday, the GBP/USD pair is seeing some mild losses, hovering around 1.3060, hitting the intra-day low of 1.3041. The rise in safe-haven flows, driven by increasing geopolitical risks, is lending support to the US dollar and pulling the major pair lower. Investors are keenly awaiting UK employment data scheduled for Tuesday, which could provide insight into the health of the labor market and the future trajectory of interest rates.
On the GBP side, dovish comments from Bank of England Governor Andrew Bailey are also weighing on the currency. He hinted that the central bank might take a more aggressive stance on rate cuts, with markets currently pricing in a 90% likelihood of a rate cut in November. This sentiment is contributing to the downward pressure on the GBP and impacting the GBP/USD pair's performance.
US Dollar Strengthens Against GBP Amid Geopolitical Tensions and Economic Data
On the US front, the broad-based US dollar is gaining strength due to safe-haven flows amid rising geopolitical tensions. This is putting downward pressure on the GBP/USD pair as investors look ahead to key economic data. Investors are closely watching UK employment data set to be released on Tuesday.
Meanwhile, data from the US Bureau of Labor Statistics showed that the annual Producer Price Index (PPI) rose by 1.8% year-over-year in September, slightly down from 1.9% in August but higher than the expected 1.6%. The core PPI, which excludes food and energy, increased by 2.8% year-over-year, beating analysts’ forecasts of 2.7%. On a monthly basis, the overall PPI remained unchanged, while the core PPI rose by 0.2%.
However, the Federal Reserve has shifted its focus from tackling inflation to maintaining a healthy job market, which is part of their dual mandate. However, a stronger-than-expected jobs report for September and reduced expectations for a 50 basis point rate cut in November could boost the USD against the British pound.
Therefore, the strengthening USD, driven by safe-haven flows and economic data, along with reduced rate cut expectations, is likely to exert downward pressure on the GBP/USD pair in the near term.
Impact of Dovish Bank of England Remarks on GBP and Upcoming Economic Data
On the GBP front, dovish comments from Bank of England (BoE) Governor Andrew Bailey are affecting the currency. He indicated that the central bank might take a more aggressive approach to cutting interest rates. Currently, markets are anticipating a 90% chance that the BoE will cut rates in November. The BoE's Monetary Policy Committee (MPC) is scheduled to meet on November 7 to announce their decision on interest rates.
Looking forward, the BoE’s Monetary Policy Committee (MPC) is scheduled to meet on November 7 to make their decision. Ahead of this important event, investors are closely watching UK employment data set to be released on Tuesday. This data could provide valuable insights into the labor market and help shape expectations for the UK’s interest rate outlook.
GBP/USD - Technical Analysis
GBP/USD is trading at $1.30658, up 0.01%, reflecting a neutral yet slightly bullish tone. The pair is currently hovering around the pivot point at $1.30509, which could serve as a crucial level for the next directional move. Immediate resistance stands at $1.30832, followed by higher levels at $1.31051 and $1.31329. A break above these levels could signal more upside potential for the pound, possibly driving it towards $1.31329.
On the downside, the first line of defense is at $1.30217, with additional support at $1.29945 and $1.29659. A drop below $1.30217 could trigger a more bearish sentiment, testing the lower levels, especially if the pound fails to hold above the pivot point.
The 50-day Exponential Moving Average (EMA) sits at $1.30726, serving as a critical resistance level. A failure to break above this EMA could indicate some consolidation, with the pair needing a stronger push to continue the uptrend. The Relative Strength Index (RSI) is currently at 50, reflecting neutral momentum and signaling that the market could swing either way depending on key developments in the coming sessions.
A buying opportunity presents itself above $1.30399, with a target to take profit at $1.31049. Traders should be cautious of downside risks, placing a stop-loss at $1.30085 to mitigate any potential losses from a reversal.
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GBP/USD Price Analysis – Oct 09, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair continued its downward trend, trading under pressure around the 1.3090 level and reaching an intra-day low of 1.3056. This decline can largely be attributed to growing market speculation that the Bank of England (BoE) is likely to accelerate its rate-cutting cycle.
This sentiment was bolstered by dovish comments from BoE Governor Andrew Bailey last week, who suggested that the central bank might adopt a more aggressive approach to rate cuts if favorable inflation data emerges. These remarks have been a significant factor exerting downward pressure on the GBP/USD pair.
Conversely, the US Dollar (USD) remains strong, hovering near a seven-week high reached last week, fueled by reduced expectations for aggressive policy easing by the Federal Reserve (Fed). This dynamic has further contributed to the downward movement of the GBP/USD pair.
Challenges for the British Pound Amid BoE Rate-Cutting Expectations
On the BoE front, the British Pound (GBP) is facing challenges as market expectations grow that the Bank of England (BoE) may speed up its rate-cutting cycle. This shift in sentiment follows dovish comments from BoE Governor Andrew Bailey last week. He indicated that the central bank might take a more aggressive approach to cutting rates if there is positive news on inflation. As a result, many traders are betting on the possibility of lower interest rates in the UK.
These developments are putting downward pressure on the GBP/USD currency pair. Investors are concerned that a rate cut could weaken the pound further, leading to increased selling. As the market reacts to these expectations, the GBP continues to struggle against the US Dollar, which remains strong due to diminishing chances of aggressive policy easing from the Federal Reserve. This combination of factors is contributing to the pound's relative underperformance in the currency markets.
US Dollar Strength and its Impact on GBP/USD Outlook
On the US front, the US Dollar (USD) is performing well, sitting close to a seven-week high reached last week. This strength is driven by decreasing expectations for aggressive policy easing by the Federal Reserve (Fed). Currently, markets believe there is over an 85% chance that the Fed will lower interest rates by 25 basis points (bps) in November.
Besides this, rising geopolitical tensions in the Middle East and disappointing news regarding China's economic stimulus are supporting the dollar. These factors are contributing to a negative outlook for the GBP/USD pair.
Given this situation, the most likely direction for the GBP/USD is downward. However, bearish traders may hold back on making significant bets until they see the release of the FOMC meeting minutes later today.
Furthermore, key reports such as the US Consumer Price Index (CPI) and the Producer Price Index (PPI), scheduled for Thursday and Friday, will also affect USD price movements. These reports could play a crucial role in determining the next significant shift in the GBP/USD pair's direction.
GBP/USD - Technical Analysis
The British Pound (GBP/USD) is trading lower at $1.30776, down 0.21% on the day, as bearish sentiment prevails. On the 4-hour chart, the pair is currently hovering below the pivot point at $1.31065, indicating selling pressure. Immediate resistance is located at $1.31345, followed by $1.31666 and $1.31972, suggesting that the pair needs to clear these levels to signal a potential bullish reversal.
On the downside, immediate support is found at $1.30595, with further levels at $1.30320 and $1.30021 providing additional protection. A drop below these levels could increase downside momentum. The 50-day Exponential Moving Average (EMA) at $1.31060 is positioned close to the pivot point, acting as a strong resistance. The Relative Strength Index (RSI) stands at 41, which is approaching oversold territory but remains neutral.
Given the current market structure, traders might consider a buying opportunity above $1.30588, targeting the pivot point at $1.31065 with a stop-loss set below $1.30310. However, failing to hold above $1.30595 could lead to further selling pressure, pushing the pair toward $1.30320. For a potential bullish reversal, GBP/USD would need to sustain a move above $1.31065, which could open the path toward $1.31345 and beyond.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias: GBP/USD trades below the pivot point at $1.31065, indicating sustained selling pressure.
- Immediate Support Levels: Key support stands at $1.30595; a break below could lead to further declines.
- RSI at 41: RSI is nearing oversold territory, signaling potential for stabilization if support holds above $1.30595.
The British Pound (GBP/USD) is trading lower at $1.30776, down 0.21% on the day, as bearish sentiment prevails. On the 4-hour chart, the pair is currently hovering below the pivot point at $1.31065, indicating selling pressure. Immediate resistance is located at $1.31345, followed by $1.31666 and $1.31972, suggesting that the pair needs to clear these levels to signal a potential bullish reversal.
On the downside, immediate support is found at $1.30595, with further levels at $1.30320 and $1.30021 providing additional protection. A drop below these levels could increase downside momentum. The 50-day Exponential Moving Average (EMA) at $1.31060 is positioned close to the pivot point, acting as a strong resistance. The Relative Strength Index (RSI) stands at 41, which is approaching oversold territory but remains neutral.
Given the current market structure, traders might consider a buying opportunity above $1.30588, targeting the pivot point at $1.31065 with a stop-loss set below $1.30310. However, failing to hold above $1.30595 could lead to further selling pressure, pushing the pair toward $1.30320. For a potential bullish reversal, GBP/USD would need to sustain a move above $1.31065, which could open the path toward $1.31345 and beyond.
GBP/USD - Trade Ideas
Entry Price – Buy Above 1.30588
Take Profit – 1.31065
Stop Loss – 1.30310
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$477/ -$278
Profit & Loss Per Mini Lot = +$47/ -$27
GBP/USD Price Analysis – Oct 07, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair failed to stop its bearish trend and remained well offered around the 1.3068 level, hitting an intraday low of 1.3062. However, the reason behind its current downfall could be the bullish US dollar, which gained traction on the back of robust growth in the United States (US) Nonfarm Payrolls (NFP) for September.
The surprisingly positive labor market figures prompted traders to reassess their positions, leading to a reduction in bets on a 50 basis point rate cut by the Federal Reserve (Fed) in November. This shift has supported the US dollar and contributed to the GBP/USD pair's losses. Meanwhile, growing expectations of another interest rate cut by the Bank of England (BoE) in November have further weighed on the GBP/USD currency pair.
Looking ahead, investors will closely monitor the US Consumer Price Index (CPI) data for September, set to be released on Thursday. This inflation data will offer critical insights into the Federal Reserve’s potential interest rate decisions for November.
US Dollar Strengthens on Robust Labor Data, Pressuring GBP/USD
On the US front, the US dollar maintained its upward trend and remain well bid near a seven-week high, thanks to strong Nonfarm Payrolls (NFP) data for September, which showed that the US economy added 254,000 jobs, the highest since March. The unemployment rate also dropped to 4.1%, and wage growth was strong at 4% year-over-year.
However, the strong labor market data has reduced expectations for a large Federal Reserve rate cut in November. Initially, traders were expecting a 50 basis point (bps) rate cut, but now that probability has been wiped out. Instead, a smaller 25 bps cut is anticipated. Chicago Fed Bank President Austan Goolsbee praised the report, saying it was "superb" and expressed confidence that if similar reports continue, the US is nearing full employment.
This strong US labor data and reduced expectations for a large Fed rate cut have pressured the GBP/USD pair, boosting the US Dollar and causing the British Pound to weaken further.
Pound Sterling Weakness Pressures GBP/USD Amid Geopolitical Tensions and Rate Cut Expectations
On the other hand, the Pound Sterling is starting the week on the bearish note against its major peers. This is mainly due to rising tensions between Iran and Israel, which have worsened market sentiment. Israel increased strikes in Beirut after its Prime Minister vowed to win, and these tensions have raised concerns about disruptions in oil supplies, pushing energy prices higher. This could result in increased foreign outflows from oil-importing countries, putting more pressure on the cable currency.
Moreover, the increasing expectations of Bank of England (BoE) interest rate cut in November are weighing on the GBP and contributed to the GBP/USD pair losses. Last week, BoE Governor Andrew Bailey hinted that the bank might act more aggressively to cut rates if inflation continues to fall.
However, BoE Chief Economist Huw Pill urged caution, suggesting that rate cuts should be gradual to avoid cutting too far or too fast. This week, key economic data such as the monthly GDP and factory data for August, set to be released on Friday, will be crucial for the Pound Sterling’s performance.
Therefore, the Pound Sterling's weakness, driven by geopolitical tensions and expectations of a Bank of England rate cut, is likely to put further downward pressure on the GBP/USD pair, making the US Dollar stronger as market sentiment remains cautious.
GBP/USD - Technical Analysis
The GBP/USD pair has shown marginal gains, trading at 1.31157, up 0.03% in the 4-hour timeframe. The pair remains in a consolidation phase as it struggles to sustain any significant momentum above the 1.3135 pivot point. Despite modest gains, the technical picture remains skewed towards the downside, with the British Pound under pressure amid a stronger U.S. dollar and concerns over the UK’s economic outlook.
On the technical front, the 50-day Exponential Moving Average (EMA) at 1.3205 acts as a critical resistance level, with the Relative Strength Index (RSI) reading at 39, signaling bearish sentiment. Immediate resistance for the pair is seen at 1.3174, followed by 1.3216 and 1.3251. If the pair manages to break above these levels, it may signal a reversal in trend. However, with the RSI below 50, a continuation of the downtrend is more likely.
On the downside, immediate support sits at 1.3071, followed by stronger support levels at 1.3037 and 1.3003. A break below the 1.3071 mark could accelerate bearish momentum and open the door for further declines towards the 1.3000 psychological level.
Conclusion: With the RSI signaling a bearish bias and the pair trading below the 50 EMA, a sell-off below 1.31350 is recommended. The take-profit target is set at 1.30700, while a stop loss at 1.31750 limits risk.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- GBP/USD remains under pressure, trading below key resistance at 1.3174 amid a bearish outlook.
- RSI at 39 signals continued downside risk; immediate support levels are 1.3071 and 1.3037.
- Break below 1.31350 may trigger further declines, targeting the 1.30700 level with limited upside potential.
The GBP/USD pair has shown marginal gains, trading at 1.31157, up 0.03% in the 4-hour timeframe. The pair remains in a consolidation phase as it struggles to sustain any significant momentum above the 1.3135 pivot point. Despite modest gains, the technical picture remains skewed towards the downside, with the British Pound under pressure amid a stronger U.S. dollar and concerns over the UK’s economic outlook.
On the technical front, the 50-day Exponential Moving Average (EMA) at 1.3205 acts as a critical resistance level, with the Relative Strength Index (RSI) reading at 39, signaling bearish sentiment. Immediate resistance for the pair is seen at 1.3174, followed by 1.3216 and 1.3251. If the pair manages to break above these levels, it may signal a reversal in trend. However, with the RSI below 50, a continuation of the downtrend is more likely.
On the downside, immediate support sits at 1.3071, followed by stronger support levels at 1.3037 and 1.3003. A break below the 1.3071 mark could accelerate bearish momentum and open the door for further declines towards the 1.3000 psychological level.
Conclusion: With the RSI signaling a bearish bias and the pair trading below the 50 EMA, a sell-off below 1.31350 is recommended. The take-profit target is set at 1.30700, while a stop loss at 1.31750 limits risk.
GBP/USD - Trade Ideas
Entry Price – Sell Below 1.31350
Take Profit – 1.30700
Stop Loss – 1.31750
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$650/ -$400
Profit & Loss Per Mini Lot = +$65/ -$40
GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Resistance: $1.33299 – A break above could see the pair testing the $1.33569 resistance.
- Immediate Support: $1.32724 – Failure to hold this level may push the pair to test $1.32368 and $1.32084.
- Pivot Point: $1.32951 – Critical for determining near-term direction.
GBP/USD is currently trading at $1.32756, down 0.07% for the day, reflecting bearish sentiment amid concerns over potential interest rate decisions by the Bank of England (BoE). The pair has been under pressure since failing to sustain above the 50-day Exponential Moving Average (EMA) at $1.33647, a critical resistance that capped recent bullish attempts. The Relative Strength Index (RSI) stands at 34, indicating weak momentum, but not yet oversold, suggesting room for further declines.
On the downside, immediate support is seen at $1.32724, closely followed by $1.32368 and $1.32084. If the pair breaks below these levels, it could trigger additional selling pressure, pushing GBP/USD further down. Conversely, on the upside, the pivot point at $1.32951 will be crucial for the pair to reclaim a bullish bias. Immediate resistance is pegged at $1.33299, with subsequent resistance levels at $1.33569 and $1.33889. A sustained break above these levels would indicate renewed bullish momentum.
The 50-day EMA at $1.33647 remains a key barrier for GBP/USD. If the pair can rise above this level, it would signal a potential trend reversal. Until then, the outlook remains cautiously bearish.
The pair remains under bearish pressure, with an entry above $1.32722 offering potential profit at $1.33299. Monitor resistance at $1.33299 for signs of a bullish reversal.
GBP/USD - Trade Ideas
Entry Price – Buy Above 1.32722
Take Profit – 1.33299
Stop Loss – 1.32339
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$577/ -$383
Profit & Loss Per Mini Lot = +$57/ -$38
GBP/USD Price Analysis – Oct 02, 2024
Daily Price Outlook
Despite a bullish US dollar, the GBP/USD pair is struggling to maintain its upward momentum, though it’s still trading positively around 1.3291, with an intra-day high of 1.3306. The recent gains in the pair can be attributed to the Bank of England's reassurance regarding financial stability, highlighting the resilience of households and businesses despite high interest rates, as well as the robust position of the UK banking system, which has bolstered investor confidence.
However, the pair's upside potential may be constrained by concerns that a consumption-driven recovery could trigger inflation, especially as the Bank of England is anticipated to cut rates in the near future.
Conversely, the US dollar has gained support following recent comments from Federal Reserve Chairman Jerome Powell, who signaled that the central bank intends to gradually lower interest rates over time. Additionally, the dollar is bolstered by a robust labor market, which further restricts the GBP/USD pair's potential for significant gains.
Impact of Bank of England's Financial Outlook on GBP/USD Pair
On the GBP front, the Bank of England's Financial Policy Committee (FPC) recently reported that risks to the UK’s financial stability have remained largely unchanged since June. They noted that valuations of equities and other assets are "stretched," suggesting a potential for sharp corrections. However, the survey also indicated that a record number of financial firms are concerned about geopolitical risks.
Despite these challenges, the BoE has maintained a counter-cyclical capital buffer at 2%, ensuring that the UK banking system is well-positioned to support lending. While households and corporate borrowers exhibit resilience to high interest rates, some small businesses and private equity-backed firms continue to experience pressure.
Besides this, BoE policymaker Megan Greene cautioned that a recovery driven by consumer spending could lead to renewed inflation. However, she noted that further interest rate cuts are likely, as prices are trending in the right direction. Greene mentioned that the neutral interest rate has likely increased since the inflation shock, although she didn’t provide a specific figure.
Traders will be watching the upcoming US ADP Employment Change report and comments from Federal Reserve officials for insights, while the BoE's Monetary Policy Report Hearings on Thursday will also be closely monitored for guidance.
Therefore, the Bank of England's cautious stance on financial stability and potential interest rate cuts may weaken the GBP against the USD. If inflation concerns persist, traders might anticipate further rate adjustments, leading to increased volatility in the GBP/USD pair.
Impact of Federal Reserve's Stance on GBP/USD Pair
On the US front, the US dollar is getting stronger because Federal Reserve Chairman Jerome Powell said the central bank will slowly lower interest rates. He clarified that the recent half-point cut doesn’t mean there will be big cuts soon; instead, future cuts will be smaller. The US dollar is also supported by a strong job market, as shown by a report that job openings increased unexpectedly to 8.04 million in August. This means more people are needed for jobs, which is a good sign for the economy.
Furthermore, the Institute for Supply Management (ISM) reported that the Manufacturing PMI remained steady at 47.2 in September, indicating a continued contraction in business activity for the sixth month in a row.
Investors are closely monitoring the potential for further interest rate cuts by the Federal Reserve. While Chairman Powell hinted at the possibility of two additional cuts of 25 basis points each this year, speculation persists regarding a larger 50 basis point cut in November, with the CME Group's FedWatch Tool indicating a 35% probability for this scenario.
Therefore, the US Dollar's strength, driven by Powell's comments on gradual interest rate cuts and a resilient labor market, weaken the GBP/USD pair. If the Fed maintains a hawkish stance, it could further pressure the GBP against the USD.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.32756, down 0.07% for the day, reflecting bearish sentiment amid concerns over potential interest rate decisions by the Bank of England (BoE). The pair has been under pressure since failing to sustain above the 50-day Exponential Moving Average (EMA) at $1.33647, a critical resistance that capped recent bullish attempts. The Relative Strength Index (RSI) stands at 34, indicating weak momentum, but not yet oversold, suggesting room for further declines.
On the downside, immediate support is seen at $1.32724, closely followed by $1.32368 and $1.32084. If the pair breaks below these levels, it could trigger additional selling pressure, pushing GBP/USD further down.
Conversely, on the upside, the pivot point at $1.32951 will be crucial for the pair to reclaim a bullish bias. Immediate resistance is pegged at $1.33299, with subsequent resistance levels at $1.33569 and $1.33889. A sustained break above these levels would indicate renewed bullish momentum.
The 50-day EMA at $1.33647 remains a key barrier for GBP/USD. If the pair can rise above this level, it would signal a potential trend reversal. Until then, the outlook remains cautiously bearish.
The pair remains under bearish pressure, with an entry above $1.32722 offering potential profit at $1.33299. Monitor resistance at $1.33299 for signs of a bullish reversal.
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GBP/USD Price Analysis – Sep 30, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward momentum, climbing to approximately 1.3394 and reaching an intraday high of 1.3423. This surge coincided with a weakening US dollar, which fell to near-yearly lows.
The dollar's decline was driven by data released on Friday, revealing a further slowdown in US inflation for August.
Meanwhile, the British Pound showed strength against major currencies as the week began. Investor optimism is growing, fueled by expectations that the Bank of England (BoE) will implement interest rate cuts at a slower pace and to a lesser extent compared to other G-7 central banks.
This positive outlook is boosting confidence in the Pound and enhancing its strength in the currency market.
Weaker US Dollar and Rate Cut Expectations Fuel GBP/USD Surge
On the US front, the broad-based US dollar has fallen to near yearly lows, propelling the GBP/USD pair higher. This decline follows data released on Friday indicating a further slowdown in US inflation for August, leading to increased expectations for interest rate cuts.
However, the market remains skeptical about a substantial 50 basis points (bps) cut, as the Federal Reserve is adopting a more cautious stance regarding potential risks in the labor market and a slowing economy.
This week, investors will closely monitor several key economic reports from the US, including the ISM Manufacturing and Services PMIs, ADP Employment figures, and September's Nonfarm Payrolls (NFP) data, as well as August's JOLTS Job Openings data.
These reports will provide valuable insights into the current job market and overall economic conditions.
Apart from this, Federal Reserve Chair Jerome Powell is scheduled to speak. His remarks could offer new guidance on interest rates, indicating whether the Fed is considering another significant cut of 50 basis points, similar to the September 18 decision, or a more measured reduction of 25 basis points.
Consequently, the weakening US dollar and increasing expectations for interest rate cuts are likely to bolster the GBP/USD pair.
However, the positive economic data from the UK and cautious comments from the Fed could further support the Pound's strength against the dollar.
Pound Sterling Strength Supported by BoE Rate Cut Expectations Amid Slower GDP Growth
On the other hand, the Pound Sterling is starting the week on a strong note against major currencies. Investors are feeling optimistic that the Bank of England (BoE) will be more measured in its approach to interest rate cuts compared to other G-7 central banks.
Many believe there’s likely to be one more cut of 25 basis points (bps) in one of the BoE’s upcoming meetings this year.
On the economic front, revised estimates for the UK's Q2 Gross Domestic Product (GDP) indicate that the economy grew by 0.5%, which is slower than the initial estimate of 0.6% quarterly.
Besides, the annual GDP growth for Q2 has also been revised down to 0.7%, compared to the preliminary estimate of 0.9%.
These figures suggest that while the UK economy is growing, the pace is slower than previously thought, which may impact future monetary policy decisions by the BoE.
Hence, the Pound Sterling's strength against major currencies, driven by expectations of slower interest rate cuts from the BoE, could support the GBP/USD pair. However, slower-than-expected GDP growth may temper gains, leading to cautious sentiment among investors in the currency market.
GBP/USD - Technical Analysis
GBP/USD is trading at $1.34054, up 0.15% for the day, indicating a mild bullish bias as it trades above its pivot point at $1.3390. The pair has been gaining traction, supported by positive UK economic data, and is now eyeing key resistance levels.
Immediate resistance is seen at $1.3427, followed by $1.3456 and $1.3487. A break above $1.3427 could pave the way for further gains, potentially targeting $1.3456 in the near term.
On the downside, immediate support lies at $1.3359, with subsequent support levels at $1.3334 and $1.3312.
The 50-day Exponential Moving Average (EMA) at $1.3390 serves as a key short-term support level, and any sustained move below this point could shift the sentiment back to bearish.
Additionally, the Relative Strength Index (RSI) is currently at 58, indicating that the pair is not overbought, leaving room for potential further upside before reaching overextended levels.
Traders looking to capitalize on the current momentum might consider entering long positions above $1.3390, targeting $1.3448 with a stop-loss set around $1.3362 to limit downside risk.
The GBP/USD outlook will remain dependent on upcoming economic data releases from both the UK and the U.S., with particular focus on U.S. jobs data and any potential shifts in Federal Reserve policy.
In summary, GBP/USD is trading with a slight bullish bias, holding above its pivot point. A break above $1.3427 could further strengthen the pair’s upward momentum. However, any move below $1.3359 would negate this bias and possibly lead to a retest of lower support levels.
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GBP/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bullish Momentum: GBP/USD trades above its pivot at $1.3390, targeting resistance at $1.3427.
- Support Levels: Immediate support is seen at $1.3359; a break below could test $1.3334.
- Buy Strategy: Consider buying above $1.3390, targeting $1.3448 with a stop-loss at $1.3362.
GBP/USD is trading at $1.34054, up 0.15% for the day, indicating a mild bullish bias as it trades above its pivot point at $1.3390. The pair has been gaining traction, supported by positive UK economic data, and is now eyeing key resistance levels.
Immediate resistance is seen at $1.3427, followed by $1.3456 and $1.3487. A break above $1.3427 could pave the way for further gains, potentially targeting $1.3456 in the near term.
On the downside, immediate support lies at $1.3359, with subsequent support levels at $1.3334 and $1.3312. The 50-day Exponential Moving Average (EMA) at $1.3390 serves as a key short-term support level, and any sustained move below this point could shift the sentiment back to bearish.
Additionally, the Relative Strength Index (RSI) is currently at 58, indicating that the pair is not overbought, leaving room for potential further upside before reaching overextended levels.
Traders looking to capitalize on the current momentum might consider entering long positions above $1.3390, targeting $1.3448 with a stop-loss set around $1.3362 to limit downside risk. The GBP/USD outlook will remain dependent on upcoming economic data releases from both the UK and the U.S., with particular focus on U.S. jobs data and any potential shifts in Federal Reserve policy.
In summary, GBP/USD is trading with a slight bullish bias, holding above its pivot point. A break above $1.3427 could further strengthen the pair’s upward momentum. However, any move below $1.3359 would negate this bias and possibly lead to a retest of lower support levels.
GBP/USD - Trade Ideas
Entry Price – Buy Above 1.33897
Take Profit – 1.34478
Stop Loss – 1.33621
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$581/ -$276
Profit & Loss Per Mini Lot = +$58/ -$27