GBP/USD - Bearish continuation pattern confirmed, eyes UK services PMI

GBP/USD daily chart shows the bearish flag breakdown.
The immediate focus on the UK services PMI release.

Omkar Godbole FXStreet Contributor

GBP/USD closed below 100-day MA on Thursday, courtesy of the Bank of England's (BOE) dovish rate hike. The spot closed at 1.3058 and traded around 1.3070 in Asia.

Bearish continuation pattern

A downside break of the inverted or bearish flag pattern indicates the sell-off from Sep. 20 high of 1.3657 has resumed. As per the measured height method, the downside break of the flag has opened doors for 1.2440 levels.

Focus on the UK services PMI

UK services PMI, due at 09:30 GMT, is expected to show the pace of expansion in the service sector activity cooled slightly to 53.3 in October from the September reading of 653.6.

A better-than-expected UK services may help Cable trim post-BOE loses. On the other hand, a weaker-than-expected services PMI would add credence to BOE's dovish forward guidance and could yield a drop below 1.30 handle.

Later in the day, the US wage growth numbers, due at 18:00 GMT, could yield big moves in the USD pairs.

GBP/USD Technical Levels

FXStreet Chief Analyst Valeria Bednarik writes - "The pair's 4 hours chart supports further declines ahead, as technical indicators barely decelerated their downward momentum once reaching oversold readings, where they stand, after the price broke below all of its moving averages, also below all of the Fibonacci that limited price action this last month."

Support levels: 1.3026 1.2985 1.2950

Resistance levels: 1.3075 1.3110 1.3150

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.