GBP Sold
GBPUSD has come under pressure amidst a combination of hawkish Fed commentary yesterday and weaker-than-forecast UK data today. Speaking last night, two prominent Fed policymakers were heard vicing concern over the Fed’s easing plans, urging the bank to show caution and retain a focus on getting inflation under control rather than pressing ahead with further easing.
Powell On Watch
While a further .25% rate-cut is still expected next month, pricing has softened a little on the back of those comments, which revealed that support for further easing is not as entrenched as the FOMC meeting last week suggested. Looking ahead today, traders will now be waiting to hear from Fed chair Powell. If he is heard reaffirming caution over inflation risks, this could lead to a higher squeeze in USD putting the pair under continued pressure through the week.
UK Data Weakens
On the UK data front, the composite PMI was seen falling back last month from the one-year highs reached over the prior month. Both September services and manufacturing PMIs came in below forecasts with manufacturing seen falling deeper into negative territory at 46 down from 47 prior, below 47.1 expected. The data adds furtehr cause for concern coming on the back of recent weak UK GDP data, suggesting that furtehr BOE easing cant be ruled out just yet.
Technical Views
GBPUSD
For now, GBPUSD remains supported by the bull trend line off earlier 2025 lows and the 1.3436 level. While this area holds, focus is on a continuation higher. However, momentum studies are weak and should we break below here, focus turns to 1.3258 as next support and 1.30 as the deeper level to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.