GBPJPY surged to 211.98, approaching the main resistance barrier at 212.10, before quickly reversing toward 211.20, confirming its continued commitment to the main bearish trend.
The main indicators are aligned in supporting the bearish outlook, as the 55-period moving average remains near the main resistance barrier. This favors further downside attempts, potentially targeting 210.40 and 209.60. However, a successful breakout above the main resistance could trigger a strong bullish rally toward several positive targets, starting at 212.65 and extending to 213.25.
The expected trading range for today is between 210.40 and 212.00
The Pound to Dollar exchange rate (GBP/USD) has climbed towards four-week highs around 1.3400 as stronger UK employment and inflation figures reinforce expectations of a November Bank of England rate hike.
Pound Sterling has outperformed its major peers, while concerns over the US artificial-intelligence investment boom continue to limit Dollar demand despite elevated American yields.
GBP/USD Forecasts: 4-Week Highs
The Pound maintained a firm tone on Wednesday after stronger UK labour-market and inflation data reinforced expectations of a Bank of England rate hike in November.
The Pound to Dollar (GBP/USD) exchange rate held above 1.3300 and traded close to 1.3380-1.3400, its strongest level in around four weeks.
Sterling has outperformed most major currencies in recent sessions as UK data surprised on the upside, while the Dollar struggled to gain traction amid renewed concerns surrounding the US technology sector.
GBP/USD faces significant resistance above 1.3400, with a sustained break potentially opening the way towards the mid-1.34s.
Save on Your GBP/USD Transfer
Get better rates and lower fees on your next international money transfer.
Compare TorFX with top UK banks in seconds and see how much you could save.
The latest UK labour-market figures showed the unemployment rate falling to 4.7% in the three months to August from 4.9% previously.
Vacancies continued to decline, but the Office for National Statistics reported a modest increase in payroll employment during August and September.
Annual regular earnings growth held around 3.7%.
Wednesday’s inflation figures added further support for Sterling.
Headline CPI accelerated to 3.5% in September from 3.1% in August, slightly above consensus forecasts, while core inflation increased to 2.8%.
Services inflation also rose to 3.7%.
The combination of stronger labour-market data and firmer inflation has effectively cemented expectations that the Bank of England will increase Bank Rate from 3.75% to 4.00% at its November meeting.
Handelsbanken FX strategist Tommy von Brömsen commented; “The UK economy is surprising on the upside. There’s room for more hiking.”
He added; “Rate differentials are going to go in favour of the pound going forward.”
There are still doubts over whether the Bank will deliver the full amount of tightening currently priced over the next 12 months.
Lloyds’ senior UK economist Nikesh Sawjani commented; “The release reinforces expectations of a November hike, rather than making a compelling case in itself for a more aggressive path thereafter.”
AI Concerns Keep Dollar on the Defensive
The Dollar has struggled to benefit fully from elevated energy prices and high US yields as investors continue to assess risks surrounding the artificial-intelligence investment boom.
Concerns have centred on highly leveraged US data-centre companies and the sustainability of current investment models.
ING commented; “Energy markets remain nervous that the US and Israel may once again attack Iran ahead of the US Mid-Terms.”
The bank added that concerns surrounding high-yield US data-centre providers remain a key threat to Dollar strength.
CoreWeave debt has traded at a substantial discount to face value, reinforcing concerns that stress in the AI investment sector could tighten US financial conditions.
The Dollar has also proved vulnerable when technology shares fall sharply, as weaker equities encourage investors to reduce expectations of further Federal Reserve tightening.
Nordea remains more constructive on the US currency.
The bank commented; “Inflows into US equities and credit are unlikely to fade simply because interest rates are slightly higher. Passive investment reinforces this trend because broad indices remain heavily concentrated in US mega-cap technology stocks.”
It added that continued unhedged investment flows into US assets should provide underlying Dollar demand.
For GBP/USD, the 1.3400 area remains the immediate technical barrier.
A sustained break higher would strengthen the recent Sterling recovery and bring 1.3450-1.3500 back into focus.
On the downside, 1.3300 should provide initial support, followed by the 1.3230-1.3250 region.
Near-term direction is likely to depend on whether UK rate expectations remain firm and whether concerns surrounding US technology and credit markets continue to restrain the Dollar.
Like this piece? Please share with your friends and colleagues:
International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
December natural gas futures are selling off hard for the sixth session in a row. The intense selling pressure started with a closing price reversal top at $3.652 on October 14. It accelerated to the downside after the market crossed to the bearish side of the 50-day moving average at $3.474 last Friday.
The main trend is also down according to the daily swing chart. It was reaffirmed earlier today when sellers took out the swing bottom at $3.234. The nearest swing tops are $3.652 and $3.709. The nearest downside target is $2.896.
What to Watch
For November natural gas futures, my bias remains to the downside. It’s being supported by the breakdown under the 50-day moving average and the downtrend on the main swing chart. Counting the October 14 main top at $3.334, the market has been down six-out-of-seven sessions. This means that on Thursday, it will be in the window of time for a closing price reversal bottom. This formation and a subsequent confirmation could soften my bearish outlook.
For December natural gas futures, the breakdown under the 50-day moving average and the breakdown under the swing bottom at $3.234 are providing the best support for my downside bias. Due to the current prolonged break in terms of price and time, on Thursday we will enter the window of time for a closing price reversal bottom. If formed and confirmed, we could see a strong counter-trend rally. This would weaken my outlook slightly.
The EURUSD pair continues to fluctuate in its latest intraday trading, as it attempts to gain positive momentum that could help it recover and resume its short-term corrective uptrend. This outlook is supported by the pair’s continued trading above EMA50, as well as the earlier breakout above a major bearish trend line. However, the emergence of a bearish crossover in the relative strength indicators suggests that the pair’s recovery attempts may face temporary obstacles.
EUR/USD daily chart showing the euro consolidating near 1.1232 after falling below the 1.1350 support level.
The euro is where I start today. Recently, we’ve seen a pretty significant sell-off in the euro, followed by some consolidation. I suspect downward pressure is still going to be a fundamental part of this market, and I believe that the 1.1350 level above remains a bit of a barrier. Any signs of exhaustion after a short-term rally is what I’m looking for.
Silver is currently trading at $57.37. What is particularly interesting to me on the 1-hour chart is a triangle pattern. This occurs when price is gradually squeezed into a smaller and smaller range, with a falling trendline above and a rising trendline below that gradually converge. Yesterday’s price action toward $58.65 was pushed away from the upper falling trendline.
The first support area grabbing my attention is at $57.39. The next area is at $56.92, the 38.2% Fibonacci level, with the lower rising trendline just below near $56.72. A break below the trendline would break the pattern and open up $56.34. The resistance area I’m watching is $57.86, followed by the upper falling trendline near $58.37 and then $58.70.
The pair took advantage of its repeated stability above 210.40, along with the positive momentum generated by stochastic as it reached overbought territory, to form new bullish waves. This brought the price within a short distance of its target at 212.20, before it began moving sideways as this level formed an additional barrier to further upside attempts.
The 55-period moving average remains positioned above the current price, creating a conflicting technical signal that prevents confirmation of a bullish trend reversal. This leads us to favor some bearish trading, potentially targeting 210.80 and then 210.00. However, a breakout above the 55-period moving average, followed by sustained trading above it, would confirm the pair’s readiness to achieve further gains, with targets at 212.65 and 213.25, respectively.
The expected trading range for today is between 210.00 and 212.00.
The EURUSD pair declined in its latest intraday trading, continuing its attempts to gain the positive momentum needed to resume its recovery and rise again. This comes amid a short-term bullish corrective wave, with ongoing positive support from trading above EMA50, which strengthens the chances of further gains in the near term, especially as the relative strength indicators have entered deeply oversold territory compared to the pair’s price action.
The pair posted another negative close below the resistance barrier at 177.80, forming bearish waves while settling near 177.45, affected by stochastics’ attempt to exit overbought territory, allowing the pair to gather additional negative momentum in the current period.
The successful accumulation of bearish momentum reinforces our negative outlook, targeting 176.35 in the near term, reaching the next target near 175.75. However, a rise above the resistance barrier, accompanied by a positive close, would confirm the pair’s submission to the dominance of the bullish corrective trend. In this scenario, we would expect the price to pursue further gains, gradually advancing toward 178.60 and 179.40.
The expected trading range for today is between 176.35 and 177.80.
Platinum maintained its bearish positioning so far, remaining below the resistance barrier at $1740.00, confirming its readiness to resume its downward attempts as it currently edges toward $1635.00.
The formation of an additional resistance barrier at $1670.00 could increase the chances of the price gathering the negative momentum needed to reach the next bearish targets, currently located at $1555.00 and $1505.00.
The expected trading range for today is between $1550.00 and $1670.00
