Analysis of GBP/USD Pair Performance
The Pound Sterling struggles to gain ground near 1.3100 against the US Dollar as traders pare Fed large rate cut bets. This is due to the robust growth in the US Nonfarm Payrolls (NFP) for September, which showed a sharp uptick in payrolls and wage growth. Additionally, growing tensions in the Middle East weigh heavily on risk-sensitive assets.
Key Points:
- GBP/USD pair faces pressure as the US Dollar holds gains near a seven-week high.
- US Dollar Index (DXY) extends its winning streak for the sixth trading day on Monday.
- Components of the US labor market report for September point to a resilient economy.
- Traders unwind bets supporting a Fed large rate cut after upbeat labor market data.
Daily Digest Market Movers: Pound Sterling Underperforms
- Pound Sterling weakens due to growing tensions between Iran and Israel in the Middle East.
- Rising energy prices and risks of Oil supply chain reduction deepen market mood.
- Expectations of a Bank of England rate cut in November weigh on the Pound Sterling.
- BoE Chief Economist advises cutting interest rates gradually to guard against risks.
- Focus on upcoming GDP and factory data release for August to gauge Pound Sterling performance.
Technical Analysis: Pound Sterling Oscillates Inside Friday’s Range
The GBP/USD pair trades inside Friday’s range, struggling to hold the 50-day EMA near 1.3110. The RSI suggests a loss of bullish momentum, but the upside trend remains intact. The pair faces resistance at the 20-day EMA near 1.3234 and support at the psychological figure of 1.3000.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange, with key trading pairs like GBP/USD, GBP/JPY, and EUR/GBP. The value of Pound Sterling is influenced by BoE monetary policy, economic data releases, and the Trade Balance indicator.