- The GBP/USD forecast recovered briefly as the dollar weakened.
- The latest UK retail sales and flash S&P Global PMI boosted the pound, reducing the probability of a rate cut by the BoE.
- Traders look ahead to the US HPI Y/Y and Consumer Confidence for further impetus.
The GBP/USD price halted its six-day losing streak, trading above 1.3350 as the dollar weakened on Tuesday. The dollar declined after traders speculated about a 25 basis point cut at Wednesday’s Federal Reserve meeting.
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The US softer-than-expected inflation data released last Friday reinforced the Fed to start easing its cycle. The Fed is expected to lower the funds rates from 3.75% – 4.00% with another cut expected in December.
The latest stronger-than-expected UK retail sales and flash S&P Global PMI data lifted the pound sterling in the UK. This suggested progressing business activity and steady consumer spending. Earlier, the softer-than-expected UK CPI hinted at a potential rate cut by the Bank of England. However, these key releases have minimized the expectations of further easing by the BoE.
Traders anticipate the BoE’s 6th November meeting for further confirmation. Meanwhile, policymakers could follow the same interest rates until they achieve further clarity about the fiscal outlook. However,further clarifyeclining growth will likely put the pound under pressure.
GBP/USD Daily Key Events
The major events in the day include
- US S&P/CS Composite-20 HPIsignificantUS HPI M/M
- US Richmond Manufacturing Index
- US CB Consumer Confidence
On Tuesday, traders look forward to the US HPI Y/Y and US HPI M/M, Richmond Manufacturing Index, and CB Consumer Confidence to gain insights into inflation, growth, and consumer sentiment.
GBP/USD Technical Forecast: Rebound Eying 1.3400
The GBP/USD 4-hour chart indicates the pair shows signs of recovery, trading above the 1.3350 level. However, the price stays below the key 200-period MA near 1.3460, signaling a broader bearish bias.
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The pair’s rebound from the 1.3330 support zone signals short upside momentum. However, the resistance zones near the 50- and 100-period MA around the 1.3360 and 1.3380 levels limits further uptrend.
The RSI at 54 shows a growing buy limit interest as the pair remains below the overbought region. This signals modest upside potential, which could improve if the pair gains some bullish strength.
A decisive break above the 1.3380 a3400 levels could trigger an upside towards the next resistance zone. In contrast, a failure to sustain above the short-term MAs could lead to a renewed downtrend.
Support Levels
Resistance Levels
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