GBP/USD Forex Signal: BoE, Fed Decision, and US Election Ahead – 04 November 2024

Bearish View

-- Set a sell-stop at 1.2845 and a take-profit at 1.2735.
-- Add a stop-loss at 1.3000.
-- Timeline: 1-2 days.
Bullish View

-- Set a buy-stop at 1.2925 and a take-profit at 1.3000.
-- Add a stop-loss at 1.2845.

The GBP/USD pair continued its strong downtrend ahead of the upcoming US election and Federal Reserve and Bank of England (BoE) decisions. It retreated to a low of 1.2845, its lowest swing since August 15.

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BoE and Fed Decisions

This will be a highly important week for the GBP/USD pair because of the upcoming general election in the United States.

With a day to go, most polls show that the election will be close, with them almost tied in most swing states.

A Trump win could lead to a stronger US dollar as investors move to safe havens since he has pledged to restart his trade wars.

The other GBP/USD news will be the upcoming Federal Reserve decision, in which officials are expected to cut interest rates by 0.25%. Odds of another cut rose after the US published a weak nonfarm payrolls (NFP) report on Friday.

These numbers showed that the economy created just 12,000 jobs last month, much lower than the expected 100k. It was also lower than the 126k that ADP reported on Wednesday.

The Fed is now more concerned about the labor market instead of inflation, which is on the path toward its target of 2.0%.

The Bank of England is also expected to cut interest rates by 0.25% in its bid to supercharge the economy. This decision comes a week after Rachel Reeves, the Chancellor of the Exchequer released her first budget, which focused on spending, tax hikes, and borrowing.

GBP/USD Technical Analysis

The GBP/USD exchange rate has been in a strong downward trend as the market focused on the upcoming US election. It has dropped from the year-to-date high of 1.3433 to 1.2845, its lowest point since August 15.

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The 25-day and 50-day moving averages have made a bearish crossover, while the pair has moved above the 38.2% Fibonacci Retracement point.

It has moved below the Ichimoku cloud indicator and the first support of the Woodie pivot points. Most notably, it has retreated below the ascending trendline that connects the lowest swings since April 22nd.

Therefore, the pair will likely drop and retest last week’s low of 1.2845. A break below that point will point to more downside as sellers target the 50% retracement point at 1.2732.

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.