Pound Sterling Rises Ahead of US Election, BoE Policy Decision Awaited
Press Hub UCapital
Share:
The British Pound (GBP) strengthens against the US Dollar (USD) as the U.S. presidential election nears and markets anticipate a 25 bps rate cut from both the Federal Reserve and the Bank of England (BoE). GBP/USD has edged up to 1.2980, with the UK’s recent budget statement also influencing inflation expectations. Technical analysis indicates the GBP/USD pair may face resistance around 1.3060 if it extends gains.
Pound Sterling Gains Traction as US Election and BoE Decision Approach
The Pound Sterling is trading near 1.2980 against the US Dollar as markets remain focused on the U.S. election and an anticipated rate cut from the Bank of England. The British currency gained slightly on Tuesday, building on positive sentiment from the recent UK budget and interest rate cut expectations. Traders are now eyeing the potential impact of the U.S. election results on the GBP/USD pair.
Fundamental Factors Supporting GBP/USD
The Pound’s rise comes as investors weigh the implications of both the U.S. election and central bank policy meetings. The BoE is widely expected to announce a 25 basis point cut on Thursday, reducing rates to 4.75% in response to inflationary pressures and economic uncertainty. Seven Monetary Policy Committee members are likely to support this move, while hawkish member Catherine Mann may argue for holding rates steady, citing the need for further inflation cooling in the services sector.
Meanwhile, the UK Autumn Forecast Statement, unveiled by Chancellor Rachel Reeves, has introduced fiscal measures expected to boost growth but potentially elevate inflation. This, coupled with the Office for Budget Responsibility’s assessment of the budget’s inflationary potential, has increased focus on the BoE’s response in light of its inflation target.
Technical Analysis: Key Support and Resistance Levels
On the technical side, GBP/USD remains range-bound just below the 50-day Exponential Moving Average (EMA) at 1.3060. The pair has found support near the 200-day EMA at 1.2850, signaling a cushion for Pound bulls in the near term. However, the pair is consolidating near the lower boundary of a rising channel on the daily chart, with the 14-day Relative Strength Index (RSI) holding above 40. This suggests sustained buying interest at lower levels, though momentum remains cautious.
Support: If GBP/USD breaks below 1.2850, the next key support lies at the round level of 1.2800, which could act as a critical floor for the pair. Resistance: On the upside, a move above the 50-day EMA at 1.3060 could open the path to further gains, but breaking this level may require additional bullish catalysts.
Outlook and Market Strategy
With both the U.S. election and BoE meeting this week, GBP/USD is poised for potential volatility. Should the BoE cut rates, it may put additional pressure on the Pound; however, a dovish Fed could provide support for GBP/USD. The pair remains at an inflection point, with key support and resistance levels likely guiding short-term direction as markets await clarity from upcoming events.
Investors should monitor election developments closely, as an outcome favoring Trump might strengthen the Dollar and weigh on GBP/USD, while a Harris win could favor further Pound appreciation.
Pound Sterling Gains Traction as US Election and BoE Decision Approach
The Pound Sterling is trading near 1.2980 against the US Dollar as markets remain focused on the U.S. election and an anticipated rate cut from the Bank of England. The British currency gained slightly on Tuesday, building on positive sentiment from the recent UK budget and interest rate cut expectations. Traders are now eyeing the potential impact of the U.S. election results on the GBP/USD pair.
Fundamental Factors Supporting GBP/USD
The Pound’s rise comes as investors weigh the implications of both the U.S. election and central bank policy meetings. The BoE is widely expected to announce a 25 basis point cut on Thursday, reducing rates to 4.75% in response to inflationary pressures and economic uncertainty. Seven Monetary Policy Committee members are likely to support this move, while hawkish member Catherine Mann may argue for holding rates steady, citing the need for further inflation cooling in the services sector.
Meanwhile, the UK Autumn Forecast Statement, unveiled by Chancellor Rachel Reeves, has introduced fiscal measures expected to boost growth but potentially elevate inflation. This, coupled with the Office for Budget Responsibility’s assessment of the budget’s inflationary potential, has increased focus on the BoE’s response in light of its inflation target.
Technical Analysis: Key Support and Resistance Levels
On the technical side, GBP/USD remains range-bound just below the 50-day Exponential Moving Average (EMA) at 1.3060. The pair has found support near the 200-day EMA at 1.2850, signaling a cushion for Pound bulls in the near term. However, the pair is consolidating near the lower boundary of a rising channel on the daily chart, with the 14-day Relative Strength Index (RSI) holding above 40. This suggests sustained buying interest at lower levels, though momentum remains cautious.
Support: If GBP/USD breaks below 1.2850, the next key support lies at the round level of 1.2800, which could act as a critical floor for the pair. Resistance: On the upside, a move above the 50-day EMA at 1.3060 could open the path to further gains, but breaking this level may require additional bullish catalysts.
Outlook and Market Strategy
With both the U.S. election and BoE meeting this week, GBP/USD is poised for potential volatility. Should the BoE cut rates, it may put additional pressure on the Pound; however, a dovish Fed could provide support for GBP/USD. The pair remains at an inflection point, with key support and resistance levels likely guiding short-term direction as markets await clarity from upcoming events.
Investors should monitor election developments closely, as an outcome favoring Trump might strengthen the Dollar and weigh on GBP/USD, while a Harris win could favor further Pound appreciation.