The Latest on GBP/USD
- GBP/USD backslid half of a percent on Wednesday.
- Global PMIs including the UK and the US are due throughout Thursday.
- Central banker appearances to dominate headlines as the week winds down.
GBP/USD shed another half of a percent on Wednesday, reaching a fresh ten-week low and edging closer to the 1.2900 level. As we head into Thursday, keep an eye out for Purchasing Managers Index (PMI) reports from both the UK and the US, along with central banker speeches from the Bank of England (BoE) and the Federal Reserve (Fed).
Market Expectations
The Pound Sterling weakened further on Wednesday, struggling against a resurgent US Dollar and anticipating a decline in UK PMI numbers for October.
Here’s what market analysts are anticipating:
- UK Services PMI to ease to 52.2 from 52.4 in the previous month.
- US Manufacturing PMI to rise to 47.5 from 47.3.
- US Services PMI to dip slightly to 55.0 from 55.2.
GBP/USD Price Forecast
GBP/USD has continued its downward trend, now hovering around the 1.2910 mark with persistent bearish pressure. The breach of the 50-day Exponential Moving Average (EMA) at 1.3079 signals a bearish stance, with the next crucial support level at the 200-day EMA of 1.2847. A break below this level could lead to further declines towards the psychological 1.2800 level.
Technical indicators suggest:
- A series of lower highs and lower lows indicating a bearish trend.
- MACD line crossing below the signal line and deepening in negative territory.
- Potential short-term relief if the pair holds above the 200-day EMA.
Traders should exercise caution as selling pressure persists, with downside risks looming unless critical support levels hold.
GBP/USD Daily Chart
Explore the daily chart for GBP/USD below:
Pound Sterling FAQs
Key Information on Pound Sterling
The Pound Sterling (GBP) is the oldest currency globally, dating back to 886 AD, and serves as the official currency of the United Kingdom. With 12% of all FX transactions, averaging $630 billion daily, GBP is the fourth most traded currency. Key trading pairs include GBP/USD (‘Cable’), GBP/JPY (‘Dragon’), and EUR/GBP. The Bank of England (BoE) issues the Pound Sterling.
Factors Affecting GBP Value
Monetary policy decisions by the Bank of England significantly impact GBP value. BoE aims for “price stability” with a 2% inflation rate, adjusting interest rates accordingly. Strong economic indicators like GDP, PMIs, and employment data influence GBP direction. A positive Trade Balance strengthens GBP, while a negative balance weakens it.
In Conclusion
Understanding the dynamics of GBP/USD and the factors influencing Pound Sterling value is crucial for investors and traders. Stay informed about upcoming economic data releases and central bank actions to make informed decisions about your financial future.