GBPUSD falls below 1.1800 after UK autumn statements

• GBPUSD is under strong selling pressure and is weighed down by a combination of factors.
• A good rally in US bond yields and risk aversion status revive demand for the safe haven dollar.
• The gloomy outlook for the UK economy weighs on the GBP and contributes to the intraday slide.

The pair GBPUSD finds new selling after an initial rise to the 1.1955-1.1960 area. Intraday selling picks up during the middle of the European session. The pair falls to fresh daily lows at 1.1783and the bears now expect a sustained break below the round 1.1800 level.

The initial leg of the intraday fall was sponsored by the appearance of some buying around the US dollarwhich is getting some support from a nice rally in US Treasury yields. Sterling, meanwhile, weakens across the board after UK Chancellor of the Exchequer Jeremy Hunt presented the autumn budget to Parliament. The combination of these mentioned factors puts downward pressure on the GBPUSD pair.

Upbeat US Retail Sales data on Wednesday is forcing market participants to lower their expectations for less aggressive tightening from the Federal Reserve. In addition, the US central bank is expected to raise interest rates by a relatively small amount, 50 basis points, at the next meeting in December. This, in turn, acts as a tailwind for US bond yields, which, along with weaker risk tone overall offers some support for safe-haven dollar.

Sterling bulls, for their part, appear unimpressed by Chancellor Jeremy Hunt’s £55bn tax plan. In addition, the Office for Budgetary Responsibility (OBR) claims that the economy is already in recession. the OBR He now expects British GDP to plummet by 1.4% next year, compared to the 1.8% growth projection he had published in March. This is considered another factor weighing on the British pound.

The pair has retraced more than 225 pips from the nearly two-month highs hit earlier this week. and appears vulnerable to further depreciation. The US economic calendar includes the Philadelphia Fed’s manufacturing index and weekly jobless claims. Also, speeches by a group of influential FOMC members will influence the dollar and give GBPUSD some momentum.

GBPUSD technical levels