- The dollar weakened slightly on Tuesday as traders awaited key data.
- The US economy could grow by 3.0% in Q3.
- Economists expect the nonfarm payrolls report to show an increase of 111,000 jobs in October.
The GBP/USD outlook shows a break in the downside as market participants await key US economic data and the US presidential election. Meanwhile, the pound rallied as traders adjusted to the Bank of England’s more cautious stance.
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The dollar weakened slightly on Tuesday as traders awaited key data. Still, he had a strong month due to better-than-expected economic data and the upcoming US presidential election. The US economy has shown resilience despite high interest rates. Consumer spending remained high and the labor sector showed solid demand. This week, key employment and GDP data await market participants.
According to estimates, the US economy could grow by 3.0% in Q3, holding back after a similar expansion in the previous quarter. Meanwhile, economists expect the nonfarm payrolls report to show an increase of 111,000 jobs in October. This outcome would indicate a slowdown in job growth compared to the previous month.
A better-than-expected jobs report will further boost the dollar, sending GBP/USD lower. On the other hand, if the labor market weakens, it could increase expectations of a Fed rate cut, weakening the dollar.
Meanwhile, next week’s US presidential election is likely to cause a lot of turmoil. The race is close, meaning the outcome will increase market volatility. What’s more, the dollar rose every time bets backed a Trump presidency. Therefore, if he wins, the dollar could rise.
Meanwhile, the pound recovered on the back of the Bank of England’s cautious policy. Policymakers such as Andrew Bailey and Catherine Mann expressed caution about inflation last week, undermining expectations of a rate cut.
GBP/USD key events today
- CB Consumer Confidence
- JOLTS Job Opens
GBP/USD Technical Outlook: Bulls are trying to take control above the 30-SMA
From the technical side, GBP/USD the price is trading above the 30-SMA, which is a sign that the bulls are triggering a downtrend. At the same time, the RSI is trading above 50, supporting bullish momentum.
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Bulls are trying to take over after the downtrend lost its strength and the RSI made a bullish divergence. However, the new move faces strong resistance at the 1.3000 level. A break above would confirm a change in sentiment, with the next target at the 1.3100 level.
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