Fundamental
Overview
The USD remains under
pressure amid the aggressive market pricing for rate cuts and better global
growth expectations following the recent huge Chinese easing measures. It’s now
a battle between global growth supporting the risk sentiment and weighing on
the greenback and the aggressive rates pricing which could be scaled back if
the US data starts to pick up.
On the GBP side, the UK PMIs on Monday were a touch softer than expected
but still solid compared to its peers. The market expects the BoE to deliver 36
bps of easing by year-end with a 25 bps cut in November priced at 77%
probability.
GBPUSD
Technical Analysis – Daily Timeframe
GBPUSD Daily
On the daily chart, we can
see that GBPUSD probed above the 1.34 handle but couldn’t extend the gains past
that level. From a risk management perspective, the buyers will have a better risk
to rewards setup around the1.3265 support zone where we can also find the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into new
lows.
GBPUSD Technical
Analysis – 4 hour Timeframe
GBPUSD 4 hour
On the 4 hour chart, we can
see that we have a trendline defining the current bullish
momentum. The buyers will likely lean on the trendline with a defined risk
below it to position for the continuation of the uptrend. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the support.
GBPUSD Technical
Analysis – 1 hour Timeframe
GBPUSD 1 hour
On the 1 hour chart, we can
see that we might be forming an ascending triangle here with the 1.3430 level
acting as resistance. The buyers will want to see the price breaking higher to
increase the bullish bets into new highs, while the sellers will likely keep on
defending the resistance to position for new lows. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we conclude the week with the US PCE report.