GBP/USD is trading at $1.29754, up 0.14%, showing strength above the key pivot at $1.29475. This pivot acts as a critical support, and as long as the pair holds above it, the outlook remains cautiously bullish.

Immediate resistance is at $1.29980, with further targets at $1.30194 and $1.30429, signaling potential for upward movement. On the downside, support levels are set at $1.29236, $1.28875, and $1.28539.

The 50-day EMA at $1.29566 reinforces short-term support, while the 200-day EMA at $1.30004 could limit gains. For now, a sustained break below $1.29475 may indicate a shift to a bearish tone.

Euro Slips Amid Weak French Data and Rising Unemployment

The euro (EUR) faced pressure today as French government budget balance widened to -173.8 billion, slightly below the previous -171.9 billion. Additionally, French industrial production declined by -0.9%, worse than the expected -0.5%.

Meanwhile, Spanish unemployment increased by 26.8K, marginally above the forecast of 26.5K, adding concerns over labor market weakness.

Traders are now focusing on the ECOFIN meetings for potential fiscal policy insights that may impact the euro’s trajectory.

EUR/USD Technical Forecast

Created on November 05, 2024

• The British pound experienced considerable noise during Monday’s trading session, which isn’t surprising given the potential disruptions and uncertainties this week.
• It’s hard to envision a scenario without significant volatility, and it seems likely that market turbulence will remain a key factor.

Keep in mind that we have the US election today, which being a third world country, the United States may not even know who its next president is for several days. So that could have markets on edge. Beyond that, we also have the Bank of England interest rate decision Thursday at noon GMT, followed seven hours later by the FOMC interest rate decision, which both are expected to cut 25 basis points.

At this point, I think it’s probably going to come down to the statement in the press conference. So, it’ll be interesting to see how this all plays out, but we are at an inflection point. It is worth noting that we are currently between the 50-day EMA above and the 200-day EMA below. So that typically will cause a bit of volatility anyways.

Looking for Momentum

With that being the case, I think you’ve got a situation where market participants continue to try to find some type of momentum, but right now just are not seeing it. If we could break above the 50-day EMA, then it would obviously be a bullish sign. However, those interest rates in America continue to be stubborn and therefore keep the British pound at bay. A breakdown below the 1.2850 level, and therefore the 200-day EMA, could really have this GBP/USD market falling apart. In that environment, this is a situation where we have a lot of questions asked about the economic outlook for a lot of places, America included.

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Created on November 05, 2024

• The British pound the euro has rallied just a bit during the early hours on Monday as we continue to see this pair try to build some type of bottom.
• This is a market that I think continues to be very noisy but with all of that i think this is a situation where the 0.845 zero level has to be watched very closely.

If we were to break above there, then I think you’ve got a scenario where the market could test the 200-day EMA and then eventually the 0.8550 level. Short-term pullbacks are likely, and that does make quite a bit of sense considering that we have the Bank of England decision later this week on Thursday, and that causes a little bit of volatility.

If the British do, of course, cut interest rates by 25 basis points as expected. I don’t know what it does for this EUR/GBP pair because it’s expected and that is something worth paying attention to. It’ll probably be all about all the internals and the voting and all of that coming out of England for interest rates, but we’ll see. Furthermore, there is a significant amount of resistance above and I think that comes into play as well.

The Resistance Above Worth Watching

After all, the 200 day EMA sits right around the 0.8470 level, and I think it does offer a significant barrier. Breaking above that would open up a bigger move to the 0.8550 level and could change the trend altogether. I suspect over the next couple of days this will be a very choppy and sideways pair, more than anything else but that’s not that out of the ordinary for the Euro against the British pound. After all, this is a market that has been noisy most of the time, and as a result, I think you have a situation where volatility continues to be a major factor.

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Created on November 01, 2024

• In my daily analysis of the Australian dollar against the Japanese yen, the market has seen a bit of a selloff previously, only to turn around and show signs of life.
• All things being equal, this is a market that has seen a lot of support near the ¥99.75 level, which has not only been important multiple times in the past, but also has a certain amount of technical support due to the fact that we have the 50 Day EMA and the 200 Day EMA indicators in that spot.

This is a market that has been stuck between 2 major levels, with the ¥99.75 level being the floor, and the ¥101.75 level above being the ceiling. Keep in mind this market had rallied quite nicely ahead of this, so the fact that we are going sideways should not be a huge surprise. After all, we have the Bank of Japan come out and basically say and do nothing, so now we are waiting for the Non-Farm Payroll announcement on Friday, the reality is that the volatility in the markets will quite often be drastic on the day, despite the fact that you may not be dealing with the US dollar directly.

Risk Appetite

Keep in mind that this is a pair that is very sensitive to risk appetite, as the Australian dollar is considered to be a “risk on currency.” That being said, the market is likely to continue to see a lot of traders looking at whether or not the global economy is going to continue to strengthen, or if we are going to see some type of faltering when it comes to the global risk appetite, and therefore it favors the Japanese yen as it is considered to be a “safety currency.”

I do favor the upside, but we had shot straight up in the air previously, so this sideways action that we have seen over the last couple of weeks makes a lot of sense, and I think is just simply a matter of “working off the froth.”

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Created on November 04, 2024

• The Euro to the US Dollar (EUR/USD) exchange rate recorded its first weekly gain in five weeks after disappointing US jobs figures reinforced bets on a rate cut by the Federal Reserve.
• The US Dollar Index – a measure of the US dollar’s ​​performance against a basket of other major currencies – fell after official figures showed that the United States added just 12,000 jobs in October, well below the consensus forecast of 113,000 and down sharply from 223,000 in September.

According to Forex trading, the Euro to the US Dollar rose to 1.0905 before retreating to 1.0870, bringing the week’s gains to 0.72%.

Meanwhile, financial markets had always expected a slowdown in October due to the hurricanes that hit the southern states. The US dollar might have chosen to ignore this slowdown were it not for some significant cuts in August and September payrolls to 78K and 223K respectively, from 159K and 254K.

Therefore, the cuts in the previous data are where the real story lies, as this data shows a trend of weaker-than-expected results that should bolster expectations for further rate cuts by the Federal Reserve. the experts added, “As it stands, the six-month average in September – before the Boeing attacks and hurricanes – was just 148K, down about 100K from the previous six months. It would not be surprising if this figure was revised downwards as well, given the clear pattern of recent downward revisions,”

A further slowdown in the trend seems likely, as hiring intentions at small US businesses remain subdued, large companies continue to face higher borrowing costs as low-yield corporate bonds mature, and job openings in the health and education sectors have declined. Knut Magnussen of DNB Markets said the large negative revision to total payroll growth in August and September suggests that the recent trend in employment is weaker than the September reading a month ago. “We expect the Fed to ignore the noise and continue with its 25bp cut this week. The 10-year yield fell by around 5bp after the release, and now the 25bp cut has been fully priced in by the markets,” he added.

According to the forex market, the US dollar has been rallying in October in response to a series of better-than-consensus US economic data that has seen a sharp decline in bets on a Fed rate cut. Thus, these figures could put a lid on this trade, which could support the EUR/USD pair.

However, Dr. Thomas Gitzel, chief economist at VP Bank, cautions that we are by no means witnessing a collapse in the US Labor market. “If we exclude one-off effects, employment growth remains robust,” he explains. Despite the weak increase in employment, there are still clear signs of weakness. The Labor market reflects the strong performance of the US economy. Despite the Fed’s rate hikes, there are no signs of an economic slowdown.”

Regarding the Fed’s rate cut this week, he says the move has always been “steady.” He added, “The range of interest rates is well above the current rate of inflation, so there is room for monetary easing regardless of Labor market developments. A healthy economy and a strong Labor market therefore have medium-term rather than short-term implications. Even if rate cuts continue next year, key interest rates are unlikely to return to pre-coronavirus levels at this time.”

Also, the next major event for the US dollar will be the US elections this week, with analysts saying a Donald Trump victory could boost the dollar. If his Republican Party wins Congress, the move could be exacerbated. Meanwhile, economists agree that the US dollar will fall sharply if Kamala Harris wins, which would erase the recent “Trump trade” premium that has built up in currency markets.

EUR/USD Technical analysis and forecast:

We expect the EUR/USD pair to remain in its current range with a bearish bias until the reaction to the announcement of the crucial US data. Also, events this week led by the US presidential election results and then the US Federal Reserve’s announcement of updating its monetary policy decisions. Furthermore, the bias for the EUR/USD pair will remain bearish as long as it is close to the support level of 1.0800. Ultimately, there will be no initial break of the downtrend without moving above the psychological resistance of 1.10000.

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Created on November 04, 2024

• For two days in a row, the GBP/USD currency pair has been trying to rebound higher to compensate for the strong losses it suffered last week, which extended to the 1.2843 support level, its lowest in three months.
• But the rebound gains did not exceed the 1.2998 level, which is stable near it at the time of writing the analysis.
• Amid this performance, the Bank of England’s decision on Thursday may draw particular attention, as it comes after the higher borrowing and spending plans revealed in the Labour government’s budget pushed borrowing costs in the United Kingdom to their highest levels in a year.

This tense backdrop is not expected to distract British policymakers from further easing at the moment. All 49 economists surveyed by Bloomberg expect them to deliver a quarter-point interest rate cut on Thursday. With the U.K. budget set to ease, Bloomberg Economics expects the accompanying quarterly forecasts to likely show higher growth and medium-term inflation.

Meanwhile, the U.K. will take a tougher approach to future public-sector pay bonuses, part of Chancellor Rachel Reeves’ renewed efforts to reassure financial markets that she will manage the country’s finances carefully.

From Washington. The U.S. Federal Reserve and many of its rich-world peers are widely expected to cut interest rates again this week, right after the U.S. presidential election that may not be decided yet. The world’s central banks, responsible for more than a third of the world’s economy, will set borrowing costs in the wake of the vote, clinging to whatever certainties they can about the likely trajectory of U.S. policy over the next four years.

With Vice President Kamala Harris and former President Donald Trump squaring off ahead of Election Day on Nov. 5, monetary officials from Washington to London may find themselves on tenterhooks. Regardless of the election, U.S. policymakers have already signalled their willingness to move forward with a more gradual pace of rate cuts after September’s half-point cut. Economists widely expect a quarter-point move on Thursday, followed by another in December — and their conviction has grown after data on Friday showed the weakest hiring since 2020.

Fed officials are trying to stay out of politics, yet they have begun the U.S. rate-cutting cycle ahead of the final stretch of the election, whose outcome could hinge on voters’ sentiment about the economy. While Fed Chairman Jerome Powell is likely to emphasize that current conditions warrant less restrictive policy when he speaks after the decision, he and his colleagues still risk political backlash.

Technical forecasts for the GBP/USD pair today:

According to the performance on the daily chart, the general trend of the GBP/USD currency pair is still bearish and there will be no initial break of the current trend without stability above the resistance of 1.3150. This requires the US dollar’s gains to stop first. If Trump wins the US presidential elections this week, the bears will have the momentum to move towards deeper bearish levels and the support station of 1.2660 will be the most prominent for this to happen. The GBP/USD price will remain in its current range until the reaction to economic data, US events and central bank announcements this week.

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Pound Sterling surges against US Dollar ahead of US Trump-Harris battle

The Pound Sterling (GBP) performs strongly against its major peers at the start of the week, with investors also focusing on the Bank of England’s (BoE) monetary policy decision, which will be announced on Thursday.

The BoE is expected to cut interest rates by 25 basis points (bps) to 4.75%. Out of the nine-member led Monetary Policy Committee (MPC), seven members are expected to vote in favor of a rate reduction, while two are expected to support leaving interest rates unchanged at 5%. BoE external MPC member Catherine Mann is likely to be one of those who would support keeping rates stable. Read more…

GBP/USD Forecast: Pound Sterling struggles to hold above key technical level

After closing the fifth consecutive week in negative territory, GBP/USD opened with a bullish gap and rose toward 1.3000 early Monday. 

The broad-based selling pressure surrounding the US Dollar (USD) fuelled GBP/USD’s rally at the beginning of the week. The uncertainty surrounding the outcome of the US presidential election seems to be weighing on the USD, especially after betting site PredictIt has placed a 51% odd of a Kamala Harris win on Tuesday, marking the vice president’s first lead over Donald Trump since October 9. Read more…

• Market participants are eagerly awaiting the outcome of the presidential election. 

• The US economy added only 12,000 jobs in October.

• The yen remained steady after the BoJ policy meeting.

The USD/JPY forecast shows some relief for the yen as the dollar eases ahead of the US presidential election. The greenback has fallen since last week as political uncertainty in the US sent investors to other safe-haven assets like the yen. At the same time, the yen has remained steady since the BoJ policy meeting. 

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Market participants are eagerly awaiting the outcome of the presidential election. Bets have fluctuated in recent weeks, with no clear winner. Initially, Trump was in the lead, which supported the dollar. However, by Monday morning, PredictIT showed that Kamala was at 54 cents while Trump was at 52 cents. A Kamala win would allow the Fed to continue lowering borrowing costs, which is bearish for the greenback. 

On the other hand, a Trump win would lead to a rally in USD/JPY as markets adjust to a hawkish outlook for the Fed. Trump’s policies on tariffs and taxes would increase inflation, which would likely force the Fed to pause or hike rates. 

Elsewhere, data on Friday revealed that the US economy added only 12,000 jobs in October, well below estimates of 106,000. Furthermore, it was a massive drop from the previous month’s reading, solidifying bets for a November rate cut. Nevertheless, experts noted that most of the change in employment was due to the impact of hurricanes on the economy. 

Meanwhile, the yen remained steady after BoJ policymakers held rates unchanged and failed to signal a cautious outlook. The changes in Japan’s political landscape had led some to expect a more cautious BoJ policy outlook.

USD/JPY key events today

The price might consolidate, with no key reports coming out today.

USD/JPY technical forecast: Sentiment shifts, but bears remain hesitant

On the technical side, the USD/JPY price trades below the 30-SMA after finding resistance at the 153.75 level. Bulls stopped near this level, where the RSI showed exhaustion in the uptrend. The RSI made a bearish divergence, later allowing bears to breach the 30-SMA support. 

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However, the new move remains weak since bears have failed to detach from the SMA. At the same time, bears face a strong hurdle at the 151.74 support level. A break below this level would allow USD/JPY to start making lower lows. Otherwise, the uptrend will continue.

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• EUR/USD started the new week higher and climbed to the 1.0900 area.
• The US Dollar stays under pressure as markets gear up for the presidential election.
• The pair’s technical outlook points to a bullish tilt in the near term.

EUR/USD opened with a bullish gap and advanced to the 1.0900 area to start the new week, with the US Dollar (USD) coming under heavy selling pressure heading into the presidential election.

Changes in betting odds for the winner of the presidential election over the weekend triggered a USD selloff. PredictIt has placed a 51% possibility of a Kamala Harris winning on Tuesday, marking the vice president’s first lead over Donald Trump on the site since October 9. Meanwhile, the disappointing labor market data could also be putting additional weight on the USD’s shoulders, even though the immediate market reaction was mixed on Friday.

The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) in the US rose by only 12,000 in October, down from the 223,000 increase (revised from 254,000) recorded in September and much worse than the market expectation of 113,000. In its press releases, the BLS noted that it was likely that payroll employment estimates in some industries were affected by the hurricanes.

Factory Orders for September will be the only data featured in the US economic docket on Monday, which is unlikely to trigger a market reaction.

Investors will keep a close eye on changes in betting odds and latest poll results. At this point, it could be risky to take a directional position in EUR/USD. 

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays above 60 and EUR/USD holds comfortably above the 200-day Simple Moving Average (SMA), currently located at 1.0870, despite having closed the previous week below this level.

EUR/USD was last seen trading near 1.0900. Once the pair rises above this level and starts using it as support, 1.0950 (100-day SMA) could be seen as next resistance before 1.1000 (round level, static level, 50-day SMA). On the downside, a daily close below 1.0870 could discourage buyers and open the door for an extended slide toward 1.0800 (round level, static level).

• GBP/USD trades in positive territory above 1.2950 on Monday.
• The US Dollar started the week under strong selling pressure.
• The cautious market mood could limit the pair’s upside.

After closing the fifth consecutive week in negative territory, GBP/USD opened with a bullish gap and rose toward 1.3000 early Monday. 

The broad-based selling pressure surrounding the US Dollar (USD) fuelled GBP/USD’s rally at the beginning of the week. The uncertainty surrounding the outcome of the US presidential election seems to be weighing on the USD, especially after betting site PredictIt has placed a 51% odd of a Kamala Harris win on Tuesday, marking the vice president’s first lead over Donald Trump since October 9. 

Meanwhile, US stock index futures trade mixed in the early European session, reflecting a cautious market mood. Investors could refrain from taking large positions until they have a clear picture of who the next president of the US will be. In case there is a selloff in US stocks following the opening bell, GBP/USD could have a difficult time stretching higher.

The US economic calendar will feature Factory Orders figures for September but markets are unlikely to react to this data. On Friday, The US Bureau of Labor Statistics (BLS) announced that Nonfarm Payrolls (NFP) in the US rose by only 12,000 in October. This reading followed the 223,000 increase (revised from 254,000) recorded in September and missed the market expectation of 113,000 by a wide margin. In its press release, the BLS explained that it was likely that payroll employment estimates in some industries were affected by the hurricanes.

GBP/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart stays slightly above 50 but GBP/USD struggles to hold above 1.2980, where the 100-day Simple Moving Average (SMA) is located, reflecting buyers’ hesitancy.

In case 1.2980 holds as resistance, 1.2940 (static level) could be seen as next support before 1.2900 (round level). Once GBP/USD stabilizes above 1.2980, 1.3000 (static level, 20-day SMA) could act as interim resistance ahead of 1.3040 (static level).