- The dollar fell slightly on Tuesday as traders awaited important data.
- The U.S. economy could expand by 3.0% in the third quarter.
- Economists expect employment to rise by 111,000 in October’s non-farm employment report.
The outlook for GBP/USD indicates a lull in the decline as market participants await key US economic data and the US presidential election. Meanwhile, the pound rallied as traders adapted to the Bank of England’s more cautious stance.
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The dollar fell slightly on Tuesday as traders awaited important data. Nevertheless, it was a strong month thanks to better-than-expected US economic data and the looming US presidential election. The US economy has shown resilience despite high interest rates. Personal consumption remains high, and demand in the labor sector remains steady. This week, market participants are awaiting important employment and GDP statistics.
Estimates suggest that the U.S. economy may expand by 3.0% in the third quarter and sustain following a similar expansion in the previous quarter. Meanwhile, economists expect that October’s non-farm employment report will show an increase of 111,000 jobs. Such a result would suggest that employment growth has slowed from the previous month.
If the jobs report is better than expected, the dollar will rise further, leading to a decline in GBP/USD. On the other hand, if the labor market weakens, expectations of a Fed rate cut will increase, potentially weakening the dollar.
Meanwhile, next week’s US presidential election is likely to cause major disruption. The race is close and depending on the outcome, there will be increased market volatility. Additionally, the dollar has risen with every bet placed in favor of Trump becoming president. Therefore, if he wins, the US dollar may appreciate.
Meanwhile, the pound rallied following the Bank of England’s cautious policy outlook. Policymakers including Andrew Bailey and Katherine Mann expressed wariness about inflation last week, hurting expectations for rate cuts.
GBP/USD major events today
- CB consumer confidence
- Jobs at JOLTS
GBP/USD Technical Outlook: Bulls attempt takeover above 30-SMA
On the technical side, GBP/USD The price is trading above the 30-SMA, a sign that the bulls are challenging the downtrend. At the same time, the RSI is trading above 50, confirming the bullish momentum.
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The bulls are attempting to take over after the downtrend has lost momentum and the RSI has undergone a bullish divergence. However, the new move faces strong resistance at the 1.3000 level. A break above this would confirm a change in sentiment and the next target would be the 1.3100 level.
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https://www.forexcrunch.com/blog/2024/10/29/gbp-usd-outlook-eyes-on-us-data-and-election/