GBP/USD remains stuck between two key DMAs ahead of central banks’ bonanza.

GBP/USD starts November on the right footing amid USD weakness, risk flows.Cable is likely to extend range play between 100 and 50DMAs.

GBP/USD is consolidating the rebound above 1.1500 so far this Tuesday, kicking off November on the right footing. Investors brace for the critical Fed and BOE rate hike decisions, with both the central banks set to announce 75 bps rate increases later this week.

Ahead of the central banks’ bonanza, investors are breathing a sigh of relief, thanks to the FX market repositioning and the rally in Chinese stocks. The risk-on market environment is boding well for the higher-yielding pound sterling at the expense of the safe-haven US dollar.

Attention turns towards the US ISM Manufacturing PMI release, although not much reaction is expected on the data release unless the figure disappoints expectations by a wide margin. Meanwhile, the UK S&P Global Final Manufacturing PMI improved to 46.2 in October vs. 45.8 expected and the first reading of 45.8.

GBP/USD: Daily chart

From a short-term technical perspective, GBP/USD is biding time to yield a sustained break above the mildly bearish 100-Daily Moving Average (DMA) at 1.1723.

The case for an upside break appears compelling, as the 14-day Relative Strength Index (RSI) remains firmer above the midline. The next upswing could materialize on the Fed or BOE policy outcome.Until then, the pair is likely to maintain its consolidative mode between the 100DMA barrier on the upside while the descending 50DMA at 1.1369 will continue guarding the downside.

In case, the tide turns against bulls, then a breach of the 50DMA support will expose the bullish 21DMA cap at 1.1316.Meanwhile, acceptance above the 100DMA will kickstart a fresh uptrend towards the 1.1800 round level.  

EUR/USD consolidates gains above 0.9900 ahead of US ISM

EUR/USD is consolidating the rebound from weekly lows above 0.9900 in the European session. The US dollar licks its wounds amid a better risk profile and falling Treasury yields. Focus shifts to US ISM Manufacturing PMI and Fed decision. 


GBP/USD clings to recovery gains above 1.1500 as risk flows dominate

GBP/USD is sustaining the recovery gains above 1.1500, as risk flows dominate in Tuesday’s European trading hours. The US dollar stays heavy amid a better market mood, tracing the yields lower. US data awaited ahead of the Fed. 


Gold: Upside remains capped at $1,650 amid pre-Fed anxiety

Gold price is holding onto the upswing from weekly lows ahead of the US ISM PMI. The US Dollar drops with Treasury yields, as risk-on market sentiment returns. Gold bulls remain cautious ahead of the all-important Fed decision on Wednesday. 

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