- GBP/USD jumps from last week’s lows, reclaiming 1.2200, amid rising geopolitical tensions.
- US stocks recover some losses, the Dollar trades under pressure, with the DXY falling 0.55% to 105.57.
- Upcoming economic data includes Q3 GDP and US Core PCE, with UK employment data and S&P Global PMIs on the horizon.
The GBP/USD pair jumps from last week’s lows and reclaims the 1.2200 level amid rising geopolitical tensions, which has been put aside, as Wall Street shows an improvement in market sentiment, a headwind for the CBOE Volatility Index (VIX) and US Treasury yields. At the time of writing, the GBP/USD pair is trading at 1.2251, with a gain of 0.73%.
GBP/USD gains 0.73%, trading at 1.2251, as US Treasury yields plummet.
US Stocks Trim Some of Last Friday’s Losses Amid Improving Market Sentiment as US Treasury Yields Continued to Plunge. Therefore, the Dollar remains under downward pressure as the Dollar Index (DXY) tracks a basket of six currencies against the Dollar and falls 0.55% to 105.57.
Elsewhere, the Chicago Fed’s national activity index came in below expectations by 0.05 at 0.02, but beat last month’s decline at -0.22. According to BBH analysts regarding the Chicago Fed index, “a positive overall reading means that the US economy is growing above trend, which speaks to its continued resilience.” It should be noted that the three-month moving average would be -0.05 compared to -0.13 in July and would be the highest since last October. Furthermore, let us remember that the signal of recession occurs when the 3-month moving average reaches -0.7, and we are far from it.”
Meanwhile, the parade of Federal Reserve (Fed) officials ended last week, as policymakers focused on next week’s monetary policy meeting. There is a growing consensus to continue to rely on data and to be patient and agile when setting policy. CME’s FedWatch tool shows no chance of a rate hike in November, although the odds for January 2024 remain above 30%.
Next, preliminary figures for the Gross Domestic Product (GDP) for the third quarter will be published in the United States, as well as the Fed’s preferred inflation indicator, the core CPI.
In the UK, employment data from the Office for National Statistics (ONS) will be published, which will not include inflation data. Additionally, the S&P Global PMI will release its preliminary readings for October.
GBP/USD Price Analysis: Technical Outlook
From a technical point of view, the GBP/USD pair remains biased downwards after the appearance of a death cross, a bearish signal. Bullish correction underway, unless it breaks the last cycle high of 1.2337, the October 11 high, the pair remains biased lower. To the upside, the next resistance is 1.2300, followed by the latter. On the contrary, if the sellers intervene and drag the exchange rate below 1.2200, this could pave the way for further losses. The first support lies at 1.2150, followed by 1.2200.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
