• GBP/USD softens to around 1.2910 in Monday’s early European session.  
• The negative view of the pair prevails below the 100-day EMA, with the bear RSI indicator. 
• The initial support level for the pair emerges at 1.2875; the immediate resistance level is located at 1.2983. 

The GBP/USD pair weakens to near 1.2910 during the early European session on Monday. The stronger US Dollar (USD) following Donald Trump’s election win continues to undermine the major pair as traders expect the inflationary impulses will keep the US Federal Reserve (Fed) from cutting rates as much as they otherwise would have. 

On the other hand, the Bank of England (BoE) reiterated that “a gradual approach to removing policy restraint remains appropriate. Monetary policy will need to continue to remain restrictive for sufficiently long.” Less dovish remarks from the UK central bank could help limit the INR’s losses in the near term. 

According to the daily chart, GBP/USD keeps the bearish vibe unchanged on the daily timeframe, with the price holding below the key 100-day Exponential Moving Average (EMA). Furthermore, the downward momentum is reinforced by the 14-day Relative Strength Index (RSI), which is located below the midline around 43.85, indicating the path of least resistance is to the downside. 

The initial support level for GBP/USD emerges at 1.2875, the low of November 7. Further south, the next contention level is located in the 1.2850-1.2840 zone, representing the lower limit of the Bollinger Band and the low of October 31. 

On the bright side, the 100-day EMA at 1.2983 acts as an immediate resistance level for the major pair. The crucial upside barrier is seen at the 1.3000 psychological level. A decisive break above this level could see a rally to 1.3048, the high of November 6. 

GBP/USD daily chart

Created on November 04, 2024

• In my daily analysis of the yen related pairs, the NZD/JPY pair has caught my attention, due to the fact that we continue to bounce around 2 of the biggest moving averages that traders pay attention to.
• This of course means the 50 Day EMA, and the 200 Day EMA. Both of these very crucial, and the fact that both of them are flat suggests to me that we are in fact essentially just consolidating a bit in order to try to sort out where to go next.

Further adding interest to this pair is the fact that we are in the midst of a symmetrical triangle, so we are almost certainly going to see some type of explosion in one direction or the other.

If we break to the upside, that could see a move to the ¥95 level, as the Japanese yen itself would probably be in trouble around the world.

On the other hand, if we were to break down from here, we could drop to the ¥89 level where we might be able to find some support. Either way, the fact that we are compressing the way we are does suggest that we are probably going to see some problems as far as volatility is concerned sooner rather than later.

Risk Appetite

The NZD/JPY currency pair is going to be very sensitive to risk appetite as the New Zealand dollar is considered to be a “risk on currency”, and of course the Japanese yen is considered to be a major “safety currency.” With this being the case, think you have to look at it through the prism of what the rest of the market is doing, because quite frankly if we see traders suddenly pick one direction or the other as far as whether or not risk appetite is picking up, then we could see an explosive move here.

All things being equal, keep in mind that you get paid at the end of every day to hold onto this pair, so I do favor the upside, but that of course assumes that we get some type of momentum play as well. In the short term, there are a lot of people out there taking advantage of the carry trade.

Not sure which broker to choose? We’ve made a list of the best forex brokers for you. 

November 10, 2024 – Written by Frank Davies

STORY LINK Pound to Dollar Week Ahead Forecast: Trump trades dominate GBPUSD

ING has upgraded its dollar forecasts following the US Presidential election and now has an end-2025 Pound to Dollar (GBP/USD) exchange rate forecast of 1.24.

MUFG added; “the bullish implications for the US dollar from a Trump victory and likely Red Sweep will cap further upside for cable beyond the 1.3000-level.”

According to ING; “A Trump win is clearly bullish for the dollar – but the challenge will be in timing it.”

There was a high degree of uncertainty ahead of the US Presidential election, although betting markets had indicated a Trump victory.

In the event, Trump secured a convincing victory in the electoral college and won the popular vote.

The Republicans have also regained control of the Senate and, while there are still some House of Representatives elections to declare, a small Republican victory the most likely outcome which would give the party a clean sweep.

GBP/USD hit 11-week lows below 1.2850 after the US election and hit selling above 1.30.

According to ING; “President-elect Trump’s overwhelming mandate for looser fiscal policy plus universal protectionism should drag the dollar higher over a multi-year period.”

It added; “we pencil in peak dollar strength for something like late 2025/early 2026, when Trump’s new administration is firing up tariffs at a time of high US bond yields.”

MUFG takes a similar view; “President-elect Trump won a very strong mandate to deliver the policies he campaigned on and that will encourage him to act on trade tariffs, deportations of illegal immigrants and to extend this tax cuts and increase fiscal spending. The extent of these policies will remain unclear for some time but investors will likely position for quick implementation that will support yields and lift the US dollar.”

As far as economics is concerned, the Federal Reserve cut interest rates by 25 basis points to 4.75% which was in line with consensus forecasts.

Fed Chair Powell played down the slightly disappointing recent inflation data and indicated that there would be further gradual rate cuts.

J.P. Morgan expects a further rate cut in December, but added; “For 2025, however, the picture will be complicated by potential for trade and tax policies to add to the inflation outlook. The U.S. central bank’s rate trajectory has been clouded by Trump’s election victory as his plans for hefty tariffs are seen as stoking inflation.”

The Bank of England also cut interest rates by 25 basis points to 4.75% which was in line with market expectations.

The bank statement was relatively cautious over the outlook for further interest rate cuts, especially with some concerns that the budget measures would put some upward pressure on inflation.

The UK 10-year bond yield hit a 12-month high near 4.55% during the week before a retreat to near 4.45%.

According to Danske Bank; “the BoE delivered a hawkish twist to its guidance emphasising their gradual approach to reducing the restrictiveness of monetary policy. We think this supports our base case of the next cut coming in February.”

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.

TAGS: Currency Predictions Pound Dollar Forecasts

November 10, 2024 – Written by Frank Davies

STORY LINK Pound to Euro Week Ahead Forecast: EUR concerns intensify, GBP Gains?

Foreign exchange analysts at MUFG expect that the Pound to Euro (GBP/EUR) exchange rate will strengthen towards 1.22.

The consensus view is that a slow pace of Bank of England rate cuts, allied with difficulties in the Euro-Zone and the threat of trade stresses under a second Trump Presidency, will undermine the Euro and support GBP/EUR.

MUFG commented; “With yields in the UK set to remain at relatively higher levels at least until early next year, the pound is set to remain attractive as a G10 carry currency.”

During the week, GBP/EUR strengthened to a November high close to 1.2040.

Rabobank commented; “GBP has found support in recent sessions in part due to market expectations that the pace of BoE rate cuts will be slower through 2025 than they would have been without the budget changes.”

The Bank of England cut interest rates by 25 basis points to 4.75% at the latest policy meeting which was in line with consensus forecasts.

There was an 8-1 vote for the decision with Mann dissenting and calling for no change.

The bank’s guidance was relatively cautious with Governor Bailey reiterating that rates should not decline too far or too quickly.

The bank also stated some reservations over the impact of the budget of inflation which could deter the BoE from cutting rates aggressively in 2025.

According to Danske Bank; “Overall, we think the communication today supports our call of a more gradual approach to the cutting cycle. We expect the next 25bp cut in February with the Bank Rate ending the year at 4.75% in 2024 and 3.25% in 2025.”

It added; “The guidance delivered yesterday highlights the more cautious approach of the BoE, which supports our case of a continued move lower in EUR/GBP. This is further amplified by UK economic outperformance and tight credit spreads.”

ING has shifted its near-term stance; “A December rate cut, we think, now looks unlikely. Previously we’d thought that the Bank would accelerate its cutting cycle beyond today, but uncertainty surrounding the budget’s impact has changed our mind on that.”

The bank still thinks that rate cuts will accelerate if there is a sustained decline in services-sector inflation.

It added; “Our view is that rate cuts will be cut at every meeting from February until rates reach 3.25% next autumn.”

The German coalition government collapsed during the week. The SPD and Green Party will continue as a minority administration in the short term with elections likely in the first quarter of 2025.

According to Rabobank; “Another fact that could keep EUR/GBP bias lower through 2025 is that Germany and France have plenty of issues of their own.”

Expectations of a policy shift could underpin the Euro in the medium term.

Deutsche Bank head of forex research George Saravelos commented; “The impact would run via the potential confidence effect boosts of a more stable government, and more importantly the direct economic effects of a potentially more pro-active fiscal stance.”

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.

TAGS: Currency Predictions Pound Euro Forecasts

• Republican candidate Donald Trump won the US presidential election.

• The Bank of England cut interest rates by 25-bps as expected.

• Next week, the US will release consumer and wholesale inflation data.

The GBP/USD weekly forecast points south amid a drop in BoE rate cut expectations and a stronger dollar after Trump’s win.

Ups and downs of GBP/USD

After a volatile week, the pound ended on a bearish candle as market participants absorbed the US election results. After weeks of uncertainty, Republican candidate Donald Trump won the election. The win was bullish for the greenback because of the expectation of higher tariffs and tax cuts during Trump’s presidency. 

–Are you interested to learn more about low spread forex brokers? Check our detailed guide-

Meanwhile, the Bank of England cut interest rates by 25-bps as expected. However, the pound rallied as policymakers noted that the new budget would likely increase inflation more than earlier expected. As a result, traders reduced the expected rate cuts in 2025 from four to three or two.

Next week’s key events for GBP/USD

Next week, the UK will release crucial employment figures shaping the outlook for Bank of England rate cuts. Already, economists do not expect another BoE rate cut this year. Robust employment figures will likely push back the timing of the next rate cut. 

At the same time, traders will focus on data on manufacturing production and gross domestic product that will show the state of the UK economy. Recent data has demonstrated better-than-expected economic performance, which has lowered the expected rate cuts. 

Meanwhile, the US will release consumer and wholesale inflation data that will determine the Fed’s future policy moves. If inflation is higher than forecast, the US central bank might hesitate to cut in December. On the other hand, rate cut expectations will surge on cooler-than-expected figures.

GBP/USD weekly technical forecast: Bears target the 1.2701 support

On the technical side, the GBP/USD price has collapsed further to make a new low below the 1.3000 key psychological level. At the same time, the price trades below the 22-SMA with the RSI in the bearish region below 50.

–Are you interested in learning more about AI trading brokers? Check our detailed guide-

After bulls paused at the 1.3400 resistance, bearish momentum surged, prompting the price to break below its support trendline and the 22-SMA. Therefore, control shifted from bulls to bears and has remained that way. At some point, bulls challenged the SMA and the 1.3000 but were not strong enough to take charge. Consequently, the coming week might see GBP/USD reaching the 1.2701.

Looking to trade forex now? Invest at eToro!

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

AUD/USD Technical Analysis

The Australian dollar has fallen pretty significantly, and again, this is not a huge surprise, mainly due to the fact that we’re still very sideways overall. At this point, the market looks as if the 0.67 level above is a significant resistance barrier, and underneath the market right now, we have the 0.65 level that offers support, as well as the 0.6550 level.

In other words, I think we continue to see a lot of back and forth, and with that being said, I don’t really think much has changed, quite frankly, and now we’re just looking for hard economic data to start moving on again. In the meantime, if you’re a short-term range-bound trader, you’ve got a couple of levels to pay close attention to. With that being said, it’s a market that is likely still just sitting around and waiting to see whether or not it becomes more risk on, or if it becomes more risk averse.

• The Pound Sterling rose for the first time in five weeks against the US Dollar.
• GBP/USD looks to US inflation and UK GDP data for the next push higher.
• Another Bear Cross on the daily chart could keep Pound Sterling sellers alive.

The Pound Sterling (GBP) staged a comeback versus the US Dollar (USD), lifting the GBP/USD pair from the lowest level in three months near 1.2835.

Pound Sterling tested 1.3000 yet again

GBP/USD returned to positive territory for the first time in five weeks, as the global market optimism and the central banks’ policy announcements overshadowed the resurgent demand for the US Dollar.

The Pound Sterling built on its recovery momentum in the early part of the week, as risk flows prevailed on hopes of Republican candidate Donald Trump’s victory in the US presidential race due on Tuesday. Additionally, profit-taking on the USD long positions ahead of the US election also helped the British Pound gain some positive traction, driving the pair back above the 1.3000 level.

However, sellers quickly returned on Wednesday after Trump decisively won the US presidential race and triggered a massive upswing in the US Dollar against its major rivals. Even though risk traders returned, the USD gains outweighed and smashed GBP/USD to the three-month lows of 1.2834, nearly 150 pips down on that day.

Pound Sterling fought back control on Thursday in the lead-up to the BoE and US Federal Reserve (Fed) interest rate decisions, as the traders resorted to position readjustments in the lead-up to the central banks’ event risk.

Buyers received a fresh boost after the BoE reduced the benchmark policy rate by 25 basis points (bps) to 4.75% from 5.0%, as expected but the Monetary Policy Committee (MPC) voted 8-1 in favor of a cut against expectations of a  7-2 voting composition. Further, Governor Andrew Bailey maintained a cautious stance on the future interest rate outlook in the post-policy meeting press conference.

Bailey noted, “we need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or by too much.”   He added that “we will need to see more on how the budget affects inflation. I do not think it is right to conclude that the path of interest rates will be very different due to budget.”

Later in the American session on Thursday, the US central bank cut the fed funds rate by 25 bps to a range of 4.50% to 4.75%, as fully priced in. The Greenback bounced slightly in a knee-jerk reaction to the Fed’s rate decision, which was quickly reversed on Chairman Powell’s press conference. Powell noted that the Fed remains on a gradual easing path and that the election won’t have any near-term effect on the policy decision. He further added that he will not quit even if asked by Trump.

In the Fed’s aftermath, the US Dollar resumed its corrective decline, allowing the major to retest the 1.3000 level. On Friday, the pair consolidated the weekly gains, as the Greenback paused its downside momentum, supported by the cautious market mood heading into the weekend.

Focus shifts back to growth and inflation data

With the central banks’ bonanza week out of the way, the top-tier economic data releases from both sides of the Atlantic grab attention.

It’s a holiday-shortened week though, as US markets are closed on Monday in observance of Veterans Day. On Tuesday, the labor market data from the UK will stand out amid a data-quiet US calendar. However, speeches from several Fed policymakers will keep traders entertained in American trading that day.

Wednesday will feature the all-important US Consumer Price Index (CPI) data, which will be followed by more Fedspeak.

The preliminary and the monthly Gross Domestic Product (GDP) readings from the UK will be in the spotlight on Thursday. Meanwhile, the US Producer Price Index (PPI) will be published alongside the weekly Jobless Claims data later that day.

Fed Chair Jerome Powell’s appearance in a panel discussion, titled “Global Perspectives” at an event hosted by the Federal Reserve Bank of Dallas, will be also eagerly awaited.

The UK and US Retail Sales data will fill in an otherwise light economic calendar on Friday.

GBP/USD: Technical Outlook

The daily technical setup for the GBP/USD pair indicates that sellers are not yet ready to give up, despite the recovery attempt.

The 200-day Simple Moving Average (SMA) at 1.2816 continued to guard the downside but the double Bear Crosses and a bearish 14-day Relative Strength Index (RSI) remained a looming threat for buyers heading into a new week. The RSI indicator holds slightly below the 50 level.

The 21-day SMA crossed the 50-day SMA from above on a daily closing basis on October 23, Meanwhile, the 21-day SMA and 100-day SMA bearish crossover occurred on Thursday, adding credence to the downside potential.

Therefore, a daily candlestick closing below the 200-day SMA at 1.2816 is critical to initiating a fresh downtrend for the Pound Sterling. 

The next bearish target is seen at the 1.2750 psychological barrier, below which a test of the August 8 low of 1.2665 cannot be ruled out.

On the flip side, a sustained recovery is possible only on a firm break above the confluence of the 21-day SMA and the 100-day SMA near the 1.2990 region.

• EUR/USD retreats below 1.0800 after posting gains on Thursday.
• The Fed lowered the policy rate by 25 bps as expected.
• The near-term technical outlook points to a lack of bullish momentum.

Following Wednesday’s sharp decline, EUR/USD gained traction and rose nearly 0.7% on Thursday. The pair, however, struggles to keep its footing and trades below 1.0800 in the European morning on Friday.

After outperforming its rivals with the initial reaction to the Donald Trump’s victory in the presidential election on Wednesday, the US Dollar (USD) lost its strength as investors booked profits ahead of the Federal Reserve’s (Fed) monetary policy announcements.

The Fed lowered the policy rate by 25 basis points to the range of 4.5%-4.75% following the November policy meeting, as anticipated. In its policy statement, the US central bank repeated that risks to the job market and inflation were “roughly in balance.” In the post-meeting press conference, Fed Chairman Jerome Powell refrained from hinting whether they will ease the policy further in December and explained that the results of the presidential election will have no effect on the monetary policy in the near term.

The market reaction to the Fed event remained largely muted. According to the CME FedWatch Tool, the probability of a 25 bps rate cut in December remains largely unchanged at about 70%. Early Friday, the cautious market mood helps the USD hold its ground and doesn’t allow EUR/USD to extend its rebound.

The University of Michigan’s (UoM) preliminary Consumer Sentiment Index for November will be featured in the US economic docket. In the meantime, US stock index futures were last seen trading virtually unchanged on the day. In case markets remain cautious following Wall Street’s opening bell, the USD could stay resilient against its peers and limit EUR/USD’s upside. 

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50, suggesting that the bearish bias remains intact following Thursday’s correction.

On the downside, static support is located at 1.0750 ahead of 1.0700 (static level, round level) and 1.0680 (static level). Looking north, initial resistance aligns at 1.0800 (static level, round level) before 1.0870 (200-day Simple Moving Average).

• GBP/USD struggles to build on Thursday’s gains, trades near 1.2950.
• The BoE and the Fed both opted for 25 bps rate cuts.
• The pair could attract buyers if it clears 1.3000 resistance.

GBP/USD gathered bullish momentum on Thursday and erased a large portion of Wednesday’s losses. The pair, however, lost its traction after failing to stabilize above 1.3000 and was last seen trading in negative territory near 1.2950.

The Bank of England (BoE) said on Thursday that it cut the bank rate by 25 basis points (bps) to 4.75%, with eight policymakers voting in favor of the decision, against Catherine Mann, who voted to leave the policy rate unchanged at 5%. This decision came in line with the market expectation.

In its policy statement, the BoE announced that it revised its forecast for the Consumer Price Index inflation in one year’s time to 2.7% from 2.4% in August’s projections, adding that the new budget is provisionally expected to boost inflation by just under 0.5 percentage points at peak between mid 2026 and early 2027. The revision to inflation projections helped Pound Sterling stay resilient against the US Dollar (USD).

In the second half of the day, the Federal Reserve (Fed) lowered the policy rate by 25 bps to the range of 4.5%-4.75%. The US central bank repeated in the policy statement that risks to the job market and inflation were “roughly in balance.” In the post-meeting press conference, Fed Chairman Jerome Powell refrained from hinting whether they will opt for another rate cut in December. When asked about Donald Trump’s victory in the presidential election, Powell explained that the results of the election will not have an effect on the monetary policy in the near term. GBP/USD retreated slightly from the session highs after the event but still ended the day with a gain of more than 0.8%.

Early Friday, the cautious market stance makes it difficult for GBP/USD to build on Thursday’s gains. At the time of press, US stock index futures were trading mixed. If risk flows return ahead of the weekend, the USD could have a hard time finding demand and open the door for an extended rebound in GBP/USD. 

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly above 50, reflecting sellers’ hesitancy. On the upside, the 100-day Simple Moving Average (SMA) forms a key resistance level at 1.3000. A weekly close above this level could attract technical buyers. In this scenario, 1.3050 (static level) could be the next hurdle before 1.3100 (50-day SMA).

Looking south, first support could be spotted at 1.2900 (static level) ahead of 1.2820 (200-day SMA).

Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.