Alexander Kuptsikevich
FxPro Financial Services Limited
Sterling continues to lose ground against the Dollar for the third session in a row, down a cumulative 2% and nearly 5% from its peak in late September as markets turned to the Trump rally.
Weak macroeconomic data have driven the recent bearish momentum. The unemployment rate rose to 4.3% in the three months to September, reversing a recent decline. Claimant count number have been on an upward trend since last June, with only a few months of weak declines. In October, claims rose by a further 26.6k, higher only during the lockdowns, highlighting the need for monetary easing to support the economy.
The slowdown in wage growth also presents the opportunity to do so. The rate of regular wage growth has fallen to 4.8% over the past year, reducing pro-inflationary risks.
The GBPUSD has broken below its 200-day moving average for the first time since May. This is an important signal of a change in trend from bullish to bearish. But more importantly, the Pound rolled back below its 50- and 200-week moving averages this week. The chart clearly shows the struggle for the 200-week at the end of October.
Over the past 10 years, there have been six dips below this curve with an average decline of 14%, the most recent of which was the smallest at 7%.
A consolidation below 1.2820 would open the potential for a further decline below 1.2000 despite the accumulated oversold condition in the month and a half of declines. At the same time, traders should keep in mind that the 1.2000 level is an important psychological mark. The Pound rebounded sharply from there between 2017 and 2020 (apart from a brief dip below at the start of the pandemic) but failed to withstand the bear attack in 2022.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
AUD/USD: Gains remain capped below 0.6500 after Wage Price Index data
AUD/USD consolidates gains below 0.6500 in Wednesday's Asian trading, failing to find any impetus from hotter-than-expected Australian Wage Price Index data. Tuesday's softer US CPI data keep the US Dollar on the defensive, validating the positive outlook for the pair amid the US-China trade deal optimism.
USD/JPY drops to test 147.00 after Japanese PPI inflation data
USD/JPY changes courses and drops to test 147.00 in the Asian session on Wednesday. The Japanese Yen rebounds after a 4% growth in the country's PPI inflation data for April, which rekinled the pressure on the BoJ to raise interest rates sooner than later. A subdued US Dollar also adds to the pair's downside.
Gold sellers likely in control whilst below 21-day SMA
Gold price is reversing a part of the previous rebound from weekly lows early Wednesday as sellers attempt to regain control amid optimism over potential US trade deals with some of its major trading partners.
Bitcoin eyes $105K breakout, Ethereum holds key support, and Ripple targets $3
Bitcoin, Ethereum, and Ripple continue to show strength as the broader crypto market sustains its bullish momentum. BTC is testing a critical resistance level that could mark a fresh push toward record highs, while ETH remains supported by a key level, signaling potential for upward continuation.
US-China trade truce only emphasizes timeless investing truths
Markets roared back to life as the US and China hit pause on their escalating trade war, with both sides emphasizing mutual respect and dignity. But it wasn’t the fine print that moved markets—it was the mood shift. Investors rushed back into risk assets, betting that the worst might be behind us.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.