GBP/USD Outlook Hinges on Break of Monthly Opening Range

British Pound Forecast: GBP/USD

GBP/USD approaches the monthly low (1.2834) as it gives back the rebound following the hawkish Bank of England (BoE) rate-cut, but the exchange rate may continue to track the positive slope in the 200-Day SMA (1.2818) should it hold within the opening range for November.

GBP/USD Outlook Hinges on Break of Monthly Opening Range

Keep in mind, GBP/USD has held above the long-term moving average since May, and the recent weakness in the exchange rate may end up short-lived as the BoE insists that ‘a gradual approach to removing policy restraint remains appropriate.’

Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here

In turn, GBP/USD may attempt to retrace the decline from the monthly high (1.3048) as the BoE appears to be unfazed by the 2024 Autumn Budget, but fresh data prints coming out of the UK may produce headwinds for the British Pound as the labor market report is anticipated to show a rise in the jobless rate.

UK Economic Calendar

The UK Unemployment Rate is seen widening to 4.1% in the three-months through September from 4.0% the month prior, while claims for jobless benefits are projected to increase 30.5K in October.

Signs of a weakening labor market may fuel the recent decline in GBP/USD as it puts pressure on the BoE to further support the economy, but a better-than-expected unemployment report may generate a bullish reaction in the British Pound as it raises the central bank’s scope to keep UK interest rates on hold at its last meeting for 2024.

With that said, GBP/USD may continue to track the positive slope in the 200-Day SMA (1.2818) as it holds above the moving average, but the exchange rate may extend the recent series of lower highs and lows should it fail to hold above the monthly low (1.2834).

GBP/USD Price Chart –Daily

Chart Prepared by David Song, Strategist; GBP/USD on TradingView

The opening range for November is in focus for GBP/USD as it initiates a series of lower highs and lows, and failure to defend the monthly low (1.2834) may push the exchange rate below the 200-Day SMA (1.2818) for the first time since May.
A break/close below 1.2820 (38.2% Fibonacci extension) may push GBP/USD towards the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) region, with the next area of interest coming in around the August low (1.2665).
At the same time, GBP/USD may face range bound conditions if it holds within the opening range for November but a breach above the monthly high (1.3048) may push GBP/UD back towards the 1.3140 (78.6% Fibonacci extension) to 1.3150 (23.6% Fibonacci extension) zone.

Additional Market Outlooks

Monetary vs Fiscal Policy: Implications for FX Markets

US Dollar Forecast: USD/JPY Defends Post-US Election Rally

US Dollar Forecast: EUR/USD Opening Range in Focus Ahead of US CPI

USD/CAD Still Holds Below Monthly High Following Dovish Fed Rate Cut

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.