GBP/USD Vulnerable on Close Below 50-Day SMA
GBP/USD extends the decline from the start October to register a fresh monthly low (1.3059).
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US Dollar Outlook: GBP/USD
GBP/USD extends the decline from the start October to register a fresh monthly low (1.3059), but the exchange rate may snap the recent series of lower highs and lows should it hold above the September low (1.3002).
GBP/USD Vulnerable on Close Below 50-Day SMA
GBP/USD trades below the 50-Day SMA (1.3080) for the first time since August as Bank of England (BoE) Governor Andrew Bailey warns that the central bank may pursue a ‘more aggressive’ approach in unwinding its restrictive policy, and the exchange rate may struggle to track the positive slope in the moving average on a close below the indicator.
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In turn, GBP/USD may no longer reflect a bullish trend from earlier this year, and the British Pound may face headwinds ahead of the next BoE meeting on November 7 as Governor Bailey prepares UK households and businesses for lower interest rates.
With that said, GBP/USD may continue to trade to fresh monthly lows as it extends the bearish price series from last week, but the exchange rate may range bound conditions if it defends the September low (1.3002).
GBP/USD Price Chart –Daily
Chart Prepared by David Song, Strategist; GBP/USD on TradingView
- GBP/USD registers a fresh monthly low (1.3059) as it continues to carve a series of lower highs and lows, and the exchange rate may no longer track the positive slope in the 50-Day SMA (1.3080) should it close below the moving average for the first time since August.
- A break/close below 1.3000 (61.8% Fibonacci extension) opens up the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) region, but GBP/USD may face range bound conditions should it hold above the September low (1.3002).
- Need a move above 1.3210 (50% Fibonacci extension) for GBP/USD to clear the bearish price series, with a break/close above 1.3310 (100% Fibonacci extension) bringing the monthly high (1.3390) on the radar.
Additional Market Outlooks
US Dollar Forecast: USD/CAD Rally Eyes September High
AUD/USD Forecast: RSI Continues to Move Away from Overbought Zone
EUR/USD Vulnerable on Close Below 50-Day SMA
USD/JPY Outlook Mired by Negative Slope in 50-Day SMA
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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