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).
Share this:
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.
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 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
Related tags:
Latest market news
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
EUR/USD weekly outlook: FOMC and ECB to set the tone
The current backdrop is modestly bearish. On Friday, the EUR/USD closed modestly lower, down for the third consecutive day. The pair also posted a weekly decline after staging a modest recovery attempt in the previous week. Out of the past 8 weeks, the EUR/USD has fallen on 6 occasions. There is not much supporting factors for the single currency right now. So, the upside remains capped.
Silver forecast: metals liquidation drags XAG/USD into $50-55 support
Silver has broken its July low and slipped into a long-term support zone as the selling in precious metals deepens. The chart shows where the metal could bottom, and next week's Fed decision may decide whether it does.
S&P 500 forecast: AI linked stocks remain under pressure
And just like that, it is Friday again and the end of a volatile week. Today offers little on the macro calendar to change the prevailing narrative, leaving markets largely at the mercy of risk appetite, oil prices and the growing unease around 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.