Fundamental Overview
The lack of catalysts recently kept the US Dollar supported across the board despite the slowdown in momentum. The market might now be looking forward to the first weeks of November when we will get the key economic data, the FOMC decision and the US elections.
There’s been also a good argument that the markets are already positioning for a Trump victory and that should translate in USD strength as it should appreciate on higher growth and less rate cuts expectations. Nevertheless, not all markets have been in sync with this view.
On the GBP side, we got the UK CPI report last week where the data missed expectations across the board and prompted the market to expect another 25 bps cut in December. In 2025, the market sees roughly four more rate cuts.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD is now trading below the 1.30 handle although the pair remains in a consolidation just beneath the key level. We are now getting close to the major trendline where we can expect the buyers to step in with a defined risk below it to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1.27 handle next.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor downward trendline defining the current bearish momentum. If the price gets there we can expect the sellers to lean on it to position for new lows, while the buyers will look for a break higher to increase the bullish bets into the 1.32 handle.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action with kind of a range between the 1.2972 low and the 1.30 handle as resistance. The sellers will want to see the price breaking lower to increase the bearish bets into the major trendline, while the buyers will look for a break higher to target a rally into the downward trendline. The red line define the average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with market moving releases scheduled for the latter part of the week. On Thursday, we get the Flash UK and US PMIs, and the US Jobless Claims figures.