GBP/USD Weekly Forecast: Lower Trading Values and Shifting Fragile Sentiment – 13 October 2024

-- The GBP/USD will begin its trading this week near the 1.30640 ratio.
-- Last week’s trading saw the currency pair move to a low around 1.30200 a few times on Thursday, before finding some buying momentum which pushed the GBP/USD above the 1.30800 level, before selling off slightly as the weekend drew near.

GDP data from the U.K last week met expectations, but the outcome remained lackluster and shows the British economy is still struggling. This week the U.K will see Consumer Price Index and Retail Sales data. The GBP/USD is within the lower tier of its weekly and monthly range. However, the downturn in the GBP/USD has not occurred only because of U.K economic data, the currency pair remains largely effected by behavioral sentiment surround the U.S Federal Reserve and USD centric attitudes. ;

Nervous Outlooks as Financial Institutions Follow the Pack ;

The GBP/USD traded rather comfortably above the 1.34000 level in the last week of September, this was only two weeks ago. The downturn in the currency pair has correlated to the broad Forex market and has seemingly developed as financial institutions have trimmed their interest rate cut outlooks from the U.S Federal Reserve. The USD was likely oversold in the last week in September as financial institutions became too aggressive with their buying of the GBP/USD. But have financial institutions now become too cautious?

U.S inflation data released last Thursday showed a slight uptick in CPI numbers. However, PPI statistics released on Friday actually came in lower then expected via the broad number. And the U.S Federal Reserve continues to maintain an interest rate that is considered by many to be too high. While some financial institutions believe the stronger than expected jobs numbers printed in early October will slow down the Fed’s dovish projections, it doesn’t mean the Fed will not cut its Federal Funds Rate in early November. ; Financial institutions are nervous and they seem to be feeding off their counterparts fragile sentiment, but perhaps they are wrong about their outlooks and will change their stances again.

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Caution is Needed by Day Traders of the GBP/USD

Conditions are likely to remain nervous in the coming days, week and yes until the U.S election is concluded and the victors are known. The Bank of England will release its interest rate policy decision on the 7th of November, only a handful of hours before the Federal Reserve announces its outcome. The U.S will be relatively light on data this coming week with housing sector and retail sales data.Will the BoE cut its interest rate by 0.25 before the Fed announcement?

⦁ The U.S election is only three weeks away and this will start to create rather choppy results in Forex, including for the GBP/USD. ;
⦁ Financial institutions may have actually liked the results from the Producer Price Index data via the U.S last Friday, but caution may now become the golden rule. ;
⦁ The ability of the GBP/USD to remain rather comfortably above the 1.30000 realm is important. ;
⦁ If 1.30000 continues to prove durable it could signal financial institutions believe higher realms will be seen again. ;

GBP/USD Weekly Outlook:Speculative price range for GBP/USD is 1.29990 to 1.31010

Trading perspectives in the GBP/USD will largely be affected by timeframes via wagering positions of large players in the coming days. The GBP/USD may feel as if it has been oversold, however day traders cannot count on the whims of financial institutions who have positions they are conducting mid-term. Day traders will likely continue to see choppy conditions this week and the question is, if support levels will prove durable enough to use as ignitions for buying positions. ;

If a trader thinks the GBP/USD exchange rate can move lower and break the 1.30000 below, they would be aiming for values not seen since the middle of August. Sellers of the GBP/USD should not get overly confident, perhaps quick hitting short-term bets aiming for incremental lows which challenge marks between 1.30500 and 1.30380 may be more realistic. Nervous shifting sentiment in the GBP/USD is likely to remain troublesome this week.

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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.