- At the time of writing, the GBP/USD pair was trading at $1.3010, almost unchanged from Monday’s opening levels.
- According to the trades, the British pound (GBP) struggled to attract investors at the start of trading in the week after the release of some disappointing domestic data.
- According to the results of the economic calendar, the latest UK distribution trading survey came in below market expectations, with the index falling from 4 to -6 this month, contrary to expectations of a rise to 10.
- Also, this has weighed on the pound’s exchange rate in the wake of the release as investors hesitated to support the pound.
Furthermore, as for the US dollar (USD) it was subdued ahead of the high-impact data. The US dollar (USD) remained steady against most of its major counterparts as the data-free US calendar saw the “dollar” struggle to find a clear path. However, USD investors are also likely to be reluctant to place any overly aggressive bets on the greenback ahead of several key data releases due this week.
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With a slew of economic data expected later in the week, the USD has remained mostly subdued. Looking ahead, the primary catalyst for GBP/USD movement is likely to be the release of the latest US JOLT job openings. Although the data is expected to show a slight decline in job creation last month, the index is expected to remain close to the strong levels seen in August, which could support the USD further. The latest CB Consumer Confidence Index could also provide some additional support to the USD if the index comes in as expected and confirms another uptick in US sentiment.
Turning to the GBP, there will be no UK data on Tuesday, which could leave the pound lower ahead of Wednesday’s Autumn Budget.
According to stock trading platforms, UK stocks rise on strong earnings. The FTSE 100 index of UK shares rose above the flat line at 8,295, extending gains from the previous session as markets assessed the results of London-traded giants. HSBC rose 2.5% to lead the day’s leaders after beating third-quarter earnings estimates amid a group restructuring, as well as announcing a $3 billion share buyback. Also, the results from the UK’s largest bank highlighted the benefit of increased monetary stimulus in China, sending Standard Chartered and Prudential up more than 1% due to their large exposure to Asia. In addition, Pearson shares jumped about 2% on stronger sales in the period. BP shares fell after reporting mixed results for the quarter, in line with other major energy companies around the world as falling energy demand has squeezed refining margins.
According to Forex trading, the dollar hovers near three-month highs. The US Dollar Index (DXY) was little changed around 104.3 on Tuesday, hovering near a three-month high, as traders continue to bet that the Federal Reserve will cut US interest rates but not as aggressively as initially expected, while key economic data is digested. The shock report showed that the number of job openings was the smallest since January 2021 and layoffs rose, while consumer confidence in the Fed rose by the most since March 2021. Advance GDP growth estimates, personal consumption expenditures and employment reports are also due this week.
Overall, the odds of a 25 basis point Fed funds rate cut next week are currently around 95%. Meanwhile, bets on a Donald Trump victory were also weighing on the dollar as his policies on tariffs, taxes and immigration are seen as inflationary. Overall, the US dollar was mostly higher against the Australian dollar and the euro.
Technical forecasts for the GPB/USD pair today:
According to the performance on the daily chart, the stability of the GBP/USD pair price around and below the psychological level of 1.30 is still a catalyst for bears to control. Technically, the downtrend will strengthen by moving towards the support levels of 1.2920, 1.2880 and 1.2790.
At these levels, all technical indicators will move towards strong oversold levels. On the other hand, and in the same time frame, moving above the resistance of 1.3150 will represent a breach of the current downtrend. Strongly, the pound will be affected today by the announcement of the details of the British budget and the US dollar awaits the announcement of the US jobs numbers and the US inflation reading.
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