- The GBP/USD outlook remains mildly subdued amid concerns over the UK’s fiscal situation, as it awaits the release of US data.
- The pound sterling slipped lower as the UK government decided to drop the income tax rate hikes.
- The Empire State Manufacturing Index and commentary from FOMC and MPC officials will reveal further policy cues.
The GBP/USD outlook suggests a weak buying momentum, as the pair trades near 1.3165, with both the pound and the US dollar responding to shifting domestic and global economic developments.
-Are you looking for automated trading? Check our detailed guide-
The UK Prime Minister, Keir Starmer, and the Finance Minister, Racheal Reeves, decided to drop the income tax rise ahead of the November 26 budget, which pressured the pound.
This move raises concerns over the UK’s fiscal outlook. The widening budget gap has investors focused on the government’s next move to tackle it. Markets are pricing in an 80% probability of a December cut by the Bank of England, bolstered by soft UK data, which further limits the pound’s upside.
From the US, the dollar holds steady as markets look forward to the delayed upcoming releases, which were halted by the federal shutdown. Investors are paying attention to non-farm payroll, expected on November 20. The data could provide a meaningful signal to the Fed for shaping the near-term monetary policy.
This development has reduced the probability of a Fed cut in December to 43%, down from 67% last week.
GBP/USD Daily Key Events
The major events in the day include:
- MPC Member Mann Speaks
- US Empire State Manufacturing Index
- FOMC Member Williams Speaks
- FOMC Member Jefferson Speaks
- Construction Spending m/m
Markets await the Empire State Manufacturing Index for insights into the manufacturing business activity in New York. Meanwhile, commentary from FOMC members William and Jefferson, as well as MPC member Mann, is expected to shed some light on the policy direction moving ahead.
GBP/USD Technical Outlook: Holds Range-Bound Above 1.3160
The GBP/USD 4-hour chart shows a range-bound momentum, as it consolidates above 1.3160 after recovering from its daily lows. The price is above the key 50-period MA around 1.3150. However, it’s below the 100-and 200-period MA, near 1.3175 and 1.3285, respectively, which caps further upside despite earlier stabilization.
-If you are interested in forex day trading, then have a read of our guide to getting started-
The RSI holds near 52, indicating a neutral to mildly bullish bias. A sustained breach above 1.3175 could extend the upside. On the contrary, a drop below 1.3133 could trigger further downside towards November’s lows near 1.3050.
Support Levels
Resistance Levels
-
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
