Fundamental Overview
The USD remains under pressure amid the aggressive market pricing for rate cuts and better global growth expectations following the recent huge Chinese easing measures. It’s now a battle between global growth supporting the risk sentiment and weighing on the greenback and the aggressive rates pricing which could be scaled back if the US data starts to pick up.
On the GBP side, the UK PMIs on Monday were a touch softer than expected but still solid compared to its peers. The market expects the BoE to deliver 36 bps of easing by year-end with a 25 bps cut in November priced at 77% probability.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD probed above the 1.34 handle but couldn’t extend the gains past that level. From a risk management perspective, the buyers will have a better risk to rewards setup around the1.3265 support zone where we can also find the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a trendline defining the current bullish momentum. The buyers will likely lean on the trendline with a defined risk below it to position for the continuation of the uptrend. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the support.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we might be forming an ascending triangle here with the 1.3430 level acting as resistance. The buyers will want to see the price breaking higher to increase the bullish bets into new highs, while the sellers will likely keep on defending the resistance to position for new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we conclude the week with the US PCE report.