Fundamental Overview
Recently, the US Dollar has been strong due to a lack of catalysts despite a slowdown in momentum. The market is now anticipating key economic data, the FOMC decision, and the US elections in early November.
There is a belief in the markets that they are preparing for a Trump victory, which could lead to USD strength based on expectations of higher growth and fewer rate cuts. However, not all markets share this perspective.
Last week, the UK CPI report showed lower-than-expected data across the board, leading to expectations of another 25 bps cut in December. The market foresees around four more rate cuts by 2025.
GBPUSD Technical Analysis – Daily Timeframe
Looking at the daily chart, GBPUSD is trading below the 1.30 level but is consolidating just below it. Near a major trendline, buyers may step in with a clear risk below it for a potential rally to new highs. Sellers, on the other hand, will want to see the price drop below to target the 1.27 level next.
GBPUSD Technical Analysis – 4 hour Timeframe
The 4-hour chart shows a minor downward trendline that indicates the current bearish trend. Sellers may use this to anticipate further lows, while buyers will lookout for a breakthrough to target the 1.32 level.
GBPUSD Technical Analysis – 1 hour Timeframe
The 1-hour chart displays a range between the low of 1.2972 and the 1.30 level acting as resistance. Sellers will wait for a breakdown to target the trendline, while buyers hope for an upward breakout towards the downtrend line. The red line outlines the average daily range for today.
Upcoming Catalysts
This week is relatively quiet in terms of data releases, with major announcements scheduled for the end of the week. Thursday will bring the Flash UK and US PMIs, along with US Jobless Claims data.
