Conviction lacking as sterling stumbles
Oct 24 (Reuters) -Cable enjoyed a modest bounce on Thursday in large part due to the dollar giving back some of its gains, though, with the U.S. election fast approaching, conviction is somewhat lacking and as a result, this latest reprieve in sterling has petered out ahead of the 1.30 handle.
Softer UK PMIs sparked minimal fanfare. Ultimately, the data has done little to change the narrative surrounding the Bank of England.
With a rate cut next month near enough a done deal, the bigger question for markets is whether the MPC has seen enough progress on inflation to justify a faster pace of easing.
However, despite the slew of BoE speakers on the docket this week, policymakers have not offered a great deal of forward guidance.
GBP/USD has spent the majority of the session anchored to the 100-day MA (1.2966) – previously support, now resistance. On the topside, near-term resistance sits at 1.3000-10, which coincides with the 200-hour MA, meanwhile, support is at 1.2900.
Given the lack of key events until next week’s UK budget and U.S. payrolls print, the broader risk tone is likely to drive much of the action, though, the general bias remains skewed towards GBP/USD weakness.
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GBP hourly chart https://tmsnrt.rs/4e1yz1Z
(Justin McQueen is a Reuters market analyst. The views expressed are his own.)
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