For four consecutive trading sessions, the exchange rate of the British Pound against the US Dollar “GBP/USD” has been attempting to maintain the strong upward rebound gains, reaching the highest resistance level at 1.2732 for three months. Despite the Dollar's recovery against other currencies, GBP/USD currency pair has not breached the support level of 1.2600. meanwhile, this confirming the resilience of the Pound's gains after investors' optimism that the Bank of England will not be hasty in lowering interest rates, as previously expected.
Top Forex Brokers
GBP/USD forecast today:
Recently, GBP/USD exchange rate has shown a strong performance, rising 3.87% in November, but the first full week of the new month could feature consolidation as investors await the all-important US jobs report next Friday. Furthermore, there are no events of interest from the UK side, which means technical considerations, momentum and US data are likely to have an impact over the coming days.
Commenting on the performance of the sterling price, Sean Osborne-senior forex analyst at Scotiabank, says: “The resilient trend momentum maintains support for the pound sterling somewhat better.” For his part, Tanmay Purohit-an analyst at Société Générale- explains that the GBP/USD pair recently broke out of the base and regained the 200-day moving average. Moreover, this led to an extended bounce that led the pair towards the neckline of the previous head and shoulders.”
Nearby, the daily MACD indicator has entered the positive zone, indicating the recovery of upward momentum. Also, the analyst added that the GBP/USD pair is likely to rise towards the 1.2670-1.2720 area, which constitutes the 61.8% correction level of the July-October decline. He added, beyond here the target is at 1.2880. On the downside, the 200-day moving average at 1.2450 would provide a downside target.
Overall, the main macroeconomic event in the Forex market will be the US non-farm payrolls report on Friday, which will indicate the extent of the “lax” US Labor market. Lately, market consensus sees a reading of 175K, and if the number is below that by a decent margin, the recent sell-off in the dollar could extend as this would confirm the recent rise in expectations for the number of US Fed rate cuts due in 2024.
Overall, the dollar has fallen over the past four weeks as the market expects an increasing amount of interest rate cuts by the Federal Reserve in 2024. Recently, the market expected more than 100 basis points of interest rate cuts; According to analysts: “We are looking at cuts of 150 basis points next year on the basis that consumer weakness will drag the US growth story to a much lower level.”
In general, the market will raise expectations if US Labor market data is weak, which will affect the price of the dollar. Furthermore, if payrolls come out stronger than expected, the market may reverse some of its recent assumptions and lead to a significant rebound in the dollar price.
GBPUSD Expectations and Analysis Today:
GBP/USD forecasts show positive performance, and according to the movements on the daily chart below. Obviously, the general trend is still bullish, and with its recent gains, talk has increased about the possibility of moving towards the psychological resistance level of 1.3000. moreover, this is not ruled out if the US job numbers come in weaker than all expectations, which may affect Negatively on the future tightening of the US central bank policy. On the other hand, over the same period, the idea of an upward trend will end if the currency pair returns to the support level of 1.2445. Today, GBP/USD currency pair will be affected by the announcement of the British services PMI reading, the US services ISM reading, and the first US jobs data.
