GBP/USD Gains Momentum Amid USD Weakness ( ? ) ...
GBP/USD Gains Momentum Amid USD Weakness
The GBP/USD pair kicked off the new week with renewed buying interest, breaking a two-day losing streak and gaining 0.30% for the day. The pair currently hovers around the 1.2160-1.2180 region, bouncing back from a one-week low touched on the previous Friday.
Uncertainty Over Fed Rate Hikes Supports GBP/USD
The US Dollar (USD) started the week on a soft note, driven by uncertainty surrounding the Federal Reserve's (Fed) future rate-hike decisions. Several dovish remarks from Fed officials have fueled expectations that the central bank will maintain interest rates for the second consecutive time in November. This dovish sentiment, coupled with a generally positive sentiment in equity markets, has put pressure on the safe-haven Greenback.
Market Reaction to US Inflation Data
Despite this soft start, recent US consumer inflation figures have revived market bets for one more Fed rate hike before the end of the year, which has led to elevated US Treasury bond yields. Additionally, ongoing tensions in the Middle East, triggered by clashes between Israel and Hamas, have supported the USD to some extent.
BoE Rate-Hiking Cycle Pause
On the other side, the Bank of England (BoE) has created uncertainty by pausing its rate-hiking cycle in September and providing few hints about its intentions regarding interest rates. This caution has discouraged GBP/USD bulls from making substantial moves.
Cautious Outlook
Considering the prevailing uncertainty in the markets, it seems prudent to await strong follow-through buying to confirm that the recent correction in the GBP/USD pair from the mid-1.2300s has concluded. For now, the pair remains in a holding pattern. There are no significant UK macroeconomic data releases scheduled for Monday. In contrast, the US will release the Empire State Manufacturing Index, which could provide insights into economic conditions.
Looking Ahead
Investors will closely follow speeches by influential FOMC members for clues about the US central bank's next policy move. Alongside US bond yields and broader risk sentiment, these factors will determine USD demand and likely impact the GBP/USD pair during the North American session. Attention will then shift to the release of the monthly UK employment details on Tuesday, potentially introducing more volatility to the GBP/USD exchange rate.
Please note that this article provides information for general purposes and is not financial advice. Trading in the forex market involves risks that individuals should carefully consider before making investment decisions.
Our preference
Short positions below 1.2280 with targets at 1.2050 & 1.19500 in extension.
The GBP/USD pair kicked off the new week with renewed buying interest, breaking a two-day losing streak and gaining 0.30% for the day. The pair currently hovers around the 1.2160-1.2180 region, bouncing back from a one-week low touched on the previous Friday.
Uncertainty Over Fed Rate Hikes Supports GBP/USD
The US Dollar (USD) started the week on a soft note, driven by uncertainty surrounding the Federal Reserve's (Fed) future rate-hike decisions. Several dovish remarks from Fed officials have fueled expectations that the central bank will maintain interest rates for the second consecutive time in November. This dovish sentiment, coupled with a generally positive sentiment in equity markets, has put pressure on the safe-haven Greenback.
Market Reaction to US Inflation Data
Despite this soft start, recent US consumer inflation figures have revived market bets for one more Fed rate hike before the end of the year, which has led to elevated US Treasury bond yields. Additionally, ongoing tensions in the Middle East, triggered by clashes between Israel and Hamas, have supported the USD to some extent.
BoE Rate-Hiking Cycle Pause
On the other side, the Bank of England (BoE) has created uncertainty by pausing its rate-hiking cycle in September and providing few hints about its intentions regarding interest rates. This caution has discouraged GBP/USD bulls from making substantial moves.
Cautious Outlook
Considering the prevailing uncertainty in the markets, it seems prudent to await strong follow-through buying to confirm that the recent correction in the GBP/USD pair from the mid-1.2300s has concluded. For now, the pair remains in a holding pattern. There are no significant UK macroeconomic data releases scheduled for Monday. In contrast, the US will release the Empire State Manufacturing Index, which could provide insights into economic conditions.
Looking Ahead
Investors will closely follow speeches by influential FOMC members for clues about the US central bank's next policy move. Alongside US bond yields and broader risk sentiment, these factors will determine USD demand and likely impact the GBP/USD pair during the North American session. Attention will then shift to the release of the monthly UK employment details on Tuesday, potentially introducing more volatility to the GBP/USD exchange rate.
Please note that this article provides information for general purposes and is not financial advice. Trading in the forex market involves risks that individuals should carefully consider before making investment decisions.
Our preference
Short positions below 1.2280 with targets at 1.2050 & 1.19500 in extension.
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