GBP/USD Outlook Hinges on Break of Monthly Opening Range
GBP/USD may continue to track the positive slope in the 200-Day SMA (1.2818) should it hold within the opening range for November.
Share this:
British Pound Forecast: GBP/USD
GBP/USD approaches the monthly low (1.2834) as it gives back the rebound following the hawkish Bank of England (BoE) rate-cut, but the exchange rate may continue to track the positive slope in the 200-Day SMA (1.2818) should it hold within the opening range for November.
GBP/USD Outlook Hinges on Break of Monthly Opening Range
Keep in mind, GBP/USD has held above the long-term moving average since May, and the recent weakness in the exchange rate may end up short-lived as the BoE insists that ‘a gradual approach to removing policy restraint remains appropriate.’
Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here
In turn, GBP/USD may attempt to retrace the decline from the monthly high (1.3048) as the BoE appears to be unfazed by the 2024 Autumn Budget, but fresh data prints coming out of the UK may produce headwinds for the British Pound as the labor market report is anticipated to show a rise in the jobless rate.
UK Economic Calendar
The UK Unemployment Rate is seen widening to 4.1% in the three-months through September from 4.0% the month prior, while claims for jobless benefits are projected to increase 30.5K in October.
Signs of a weakening labor market may fuel the recent decline in GBP/USD as it puts pressure on the BoE to further support the economy, but a better-than-expected unemployment report may generate a bullish reaction in the British Pound as it raises the central bank’s scope to keep UK interest rates on hold at its last meeting for 2024.
With that said, GBP/USD may continue to track the positive slope in the 200-Day SMA (1.2818) as it holds above the moving average, but the exchange rate may extend the recent series of lower highs and lows should it fail to hold above the monthly low (1.2834).
GBP/USD Price Chart –Daily
Chart Prepared by David Song, Strategist; GBP/USD on TradingView
- The opening range for November is in focus for GBP/USD as it initiates a series of lower highs and lows, and failure to defend the monthly low (1.2834) may push the exchange rate below the 200-Day SMA (1.2818) for the first time since May.
- A break/close below 1.2820 (38.2% Fibonacci extension) may push GBP/USD towards the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) region, with the next area of interest coming in around the August low (1.2665).
- At the same time, GBP/USD may face range bound conditions if it holds within the opening range for November but a breach above the monthly high (1.3048) may push GBP/UD back towards the 1.3140 (78.6% Fibonacci extension) to 1.3150 (23.6% Fibonacci extension) zone.
Additional Market Outlooks
Monetary vs Fiscal Policy: Implications for FX Markets
US Dollar Forecast: USD/JPY Defends Post-US Election Rally
US Dollar Forecast: EUR/USD Opening Range in Focus Ahead of US CPI
USD/CAD Still Holds Below Monthly High Following Dovish Fed Rate Cut
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Gold forecast: XAU/USD struggles as traders eye breakdown
After a three-day recovery, gold prices have fallen in excess of 1.2% so far today, as the metal continues to hover around the $4,000 level. Today’s bearish price action threatens this key level, especially when you consider last week’s 4% sell-off. For now, gold is hanging around this psychological threshold, but it remains to be seen whether it will hold for too long.
Nasdaq 100 forecast: Alphabet results reignite AI concerns
Disappointing results from a couple of major global technology names have put the AI trade back under scrutiny, with Nasdaq 100 futures falling around 1% after giving up the post-FOMC gains seen overnight. For now, our short-term Nasdaq 100 forecast remains more on the cautious side of things than outright bearish. The index remains close to its record highs and continues to find dip buyers. But could that change soon?
DAX forecast: AI optimism offers relief ahead of central bank meetings
The DAX is finding some relief from the recent improvement in risk appetite, with investors becoming less concerned about the sustainability of the AI trade
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.