GBP/USD outlook: Currency Pair of the Week | November 2, 2026

US midterms, BoE and payrolls set up a pivotal week for GBP/USD outlook

 

The GBP/USD heads into a crowded week of event risk, with the midterm elections, a Bank of England rate decision and Friday's non-farm payrolls report all capable of moving markets sharply. The greenback remains fundamentally well supported by a hawkish Federal Reserve, but much of that is already priced in, while the renewed sell-off in technology stocks has exposed its vulnerability. With political risk also building in Washington, the GBP/USD outlook could improve slightly, although  upside could be capped by any further big rises in oil prices.

 

• The US midterm elections on Tuesday could severely restrict President Trump's agenda if the Democrats win both chambers of Congress
• The Bank of England is widely expected to raise interest rates to 4% from 3.75% on Thursday
• A strong US jobs report on Friday would cement expectations of a December rate hike from the Fed

 

Midterm elections could cap the dollar's gains

 

Tuesday's midterm elections are the first big test, and the outcome could have important implications for both the dollar and the stock market. A split or Democrat-run Congress would make it considerably harder for President Trump to get things done, whether that is domestic legislation or foreign policy.

 

A full Democratic sweep, which looks increasingly likely, would mean the party taking control of both the House of Representatives and the Senate on the same night. That would severely restrict the president's agenda and could revive concerns over government shutdown risks and another round of debt-ceiling negotiations.

 

That leaves net-long dollar positions vulnerable to precautionary unwinding around the vote. The Nasdaq 100 is also worth watching closely. Whenever the technology sector has come under pressure recently, so too has the dollar, as safe-haven demand for Treasuries drags yields lower.

 

Bank of England expected to lift rates to 4%

 

The pound and the euro are among major currencies finding good support from the 3.5% drop in oil prices today, following reports that President Donald Trump wants to give diplomacy with Iran more time. That marks a reversal from Friday, when markets were positioning for the possibility of renewed US action over the weekend.

 

The GBP/USD will remain in focus this week, with US mid-terms and NFP to provide the dollar clear direction. From the UK, the main even it is happening on Thursday, when the Bank of England is widely expected to raise interest rates to 4% from 3.75%. The case for tighter policy has strengthened as energy prices continue to climb on the back of the war in the Middle East, keeping the upside risks to UK inflation firmly on the table.

 

With a hike largely priced in, the decision itself may not be the main event. The key question is whether the Bank signals more increases to come or hints that it is prepared to pause. A hawkish steer would offer the pound some support, while a more cautious message could leave sterling exposed.

 

Payrolls could cement a December Fed hike

 

Friday's US non-farm payrolls report, due at 13:30 GMT, rounds off the week. Employment has clearly taken a back seat, with both the market and the Federal Reserve far more concerned about inflation. Still, jobs data has a habit of moving markets sharply, and this release should be no exception.

 

The Fed kept interest rates unchanged at its meeting last week, but a December rate hike is highly likely. US data has given policymakers little reason to sound more dovish, with third-quarter GDP expanding by 3.4%, slightly ahead of expectations, while core PCE inflation rose 0.3% month on month in September. A strong payrolls print would therefore all but seal the case for tightening in December.

 

GBP/USD outlook: technical analysis and levels to watch

 

The technical GBP/USD outlook remains mixed as the pair trades inside a range. Key resistance is seen between 1.3435 and 1.3475. Here, the 200-day average meets prior support zone and the resistance trend of its rising wedge pattern.

 

 

Support on the GBP/USD is seen around 1.3340 and then 1.3270/5 area. Below that the long-term 1.3140-80 support range will come into focus again. Here, price has bounced on at least three separate occasions.

 

Frequently Asked Questions

When are the US midterm elections?

The US midterm elections take place on Tuesday 3 November. Control of the House of Representatives and the Senate is what matters most for the dollar and the Nasdaq 100, with a Democratic clean sweep the outcome most likely to restrict President Trump's agenda.

What time is the Bank of England rate decision?

The Bank of England announces its policy decision on Thursday 5 November at 12:00 GMT. Sterling and the UK 100 are the markets most directly exposed.

When is the next US non-farm payrolls report?

The US non-farm payrolls report is released on Friday 6 November at 13:30 GMT. The dollar and gold are likely to be the most sensitive to the outcome.

 

-- Written by Fawad Razaqzada, Market Analyst | Follow Fawad on Twitter @Trader_F_R