Fundamental
Overview
The USD weakened across the
board yesterday following soft ADP data and a Bloomberg report saying that Hassett emerged as the
frontrunner for the Fed Chair position.
The greenback was already
under some pressure caused by Fed’s Williams endorsement for a December cut on Friday. The
probability for a December cut is now at 76%, which generally makes it a done
deal.
We won’t get much data
before the FOMC meeting, so the focus will likely be mainly on jobless claims
and ADP data. Weak data should keep weighing on the greenback, while strong
data could provide some short-term support. At the end of the day though, it’s
all about the FOMC decision and the following NFP and CPI reports.
On the GBP side, the market
sees an 85% probability of a rate cut in December and a total of 61 bps of
easing by the end of 2026 following soft UK data. Today, the focus will be on
the Autumn
Budget announcement which is going to be a key risk event for the pound.
GBPUSD
Technical Analysis – Daily Timeframe
GBPUSD daily
On the daily chart, we can
see that GBPUSD broke above the downward trendline and extended the gains into the
most recent swing high at 1.3215. The sellers will likely step in around these
levels with a defined risk above the swing high to position for a drop into new
lows. The buyers, on the other hand, will look for a break higher to increase
the bullish bets into the 1.33 handle next.
GBPUSD Technical
Analysis – 4 hour Timeframe
GBPUSD 4 hour
On the 4 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum. If we
get a pullback, we can expect the buyers to lean on the trendline with a
defined risk below it to position for a rally into the 1.33 handle. The
sellers, on the other hand, will look for a break lower to increase the bearish
bets into new lows.
GBPUSD Technical
Analysis – 1 hour Timeframe
GBPUSD 1 hour
On the 1 hour chart, there’s
not much else we can add here as the buyers will look for longs around the trendline
or above the major swing high, while the sellers will look for shorts around
the swing high or below the trendline. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures. Tomorrow, we have the US
Thanksgiving holiday which is likely to make the final part of the week more
rangebound. Finally, on Friday we conclude the week with the preliminary
inflation data from the major Eurozone economies.
