Friday’s Reversal Below 1.30 Indicates Further Downside for GBPUSD
Skerdian Meta•Monday, October 28, 2024•1 min read
After hitting lows of 1.29 last week, the GBP/USD pair attempted a rebound but faced resistance around 1.30. By Friday, a bearish reversal brought the price down to 1.2960, signaling that GBP buyers were hesitant to push past the 1.30 level. UK Manufacturing and Services PMI readings have highlighted a period of economic weakness, making the Bank of England more dovish, with the latest UK Confederation of British Industry’s Realized Sales data reinforcing this softer economic outlook.
GBP/USD Chart H4 – The 50 SMA Rejected the Price Again
The GBP/USD trend has shifted downward in October, reaching 1.2907 on Wednesday—a drop of over 5 cents this month. This decline underscores the stark contrast between the UK’s economic softness and the stronger U.S. economy, as shown by recent UK PMI data that pointed to near stagnation. Despite a brief corrective move back toward 1.30, weak fundamentals in the UK economy continue to suggest further declines are likely.
In the past four weeks, the British pound has dropped over 4% from its annual highs, with the pair sitting at 1.2907 on Wednesday evening. Sterling briefly retraced higher on Thursday, but the USD’s strength halted upward momentum, and the decline resumed Friday as buyers struggled to clear the 1.30 threshold, where the 50 SMA provided resistance.
Confederation of British Industry’s Realized Sales
Next week brings key events that could impact the USD, including the release of US Non-Farm Payrolls (NFP) and US inflation data ahead of the November open. The FOMC rate decision, upcoming US elections, and NFPs all introduce significant event risks for USD pairs in the coming weeks.
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.