• The pound finds buyers at 1.3665 after a 0.75% daily decline.
  • The sterling suffers against a stronger USD.
  • GBP/USD's reaction to the BoE is unpredictable – MUFG.

The British pound is attempting to find support at 1.3665 lows on Friday’s late US trading, after plummeting more than 0.7% on the day. End-of-month moves with November’s Federal Reserve meeting around the corner, have boosted the US dollar across the board.

The USD surges on expectations of a hawkish Fed statement

The GBP/USD has dropped sharply on Friday, weighed by broad-based US dollar strength in a combination of a moderate risk aversion, and higher expectations of a hawkish turn by the Federal Reserve next week.

US macroeconomic data might have encouraged investors to close US dollar shorts, especially after the Core Personal Consumption Expenditures, the Fed’s preferred inflation gauge, accelerated 3,6% year-on-year in September. These figures reaffirm the idea that the central bank will be forced to accelerate its monetary normalization plan, which has favored the US dollar.

Higher inflation expectations have also pushed the US Treasury bond yields higher, which has increased bullish traction on the USD.

All in all, the investors are bracing for an eventful next week, with the meetings of both, the Bank of England and the Federal Reserve scheduled. The Federal Reserve is expected to announce the end of its monetary stimulus, while, according to some market sources, the BoE might hike interest rates for the first time in three years in order to tackle inflation pressures.

GBP/USD’s reaction to BoE is unpredictable – MUFG

FX analysts at MUFG consider that the BoE could hike rates by 0.15% next week, although they warn about a negative GBP reaction: “Based on the recent FX response to central bank guidance we could well see GBP dismissing this guidance of slower tightening going forward. However, we would expect GBP to ultimately weaken on the back of a 15bp hike and guidance suggesting the need for less tightening than what is currently priced. That message may not be explicit but should be implied by the MPR forecasts.”

Technical levels to watch


Today last price 1.3689
Today Daily Change -0.0099
Today Daily Change % -0.72
Today daily open 1.3788
Daily SMA20 1.3691
Daily SMA50 1.3714
Daily SMA100 1.3785
Daily SMA200 1.3852
Previous Daily High 1.3815
Previous Daily Low 1.3722
Previous Weekly High 1.3834
Previous Weekly Low 1.3709
Previous Monthly High 1.3913
Previous Monthly Low 1.3412
Daily Fibonacci 38.2% 1.3779
Daily Fibonacci 61.8% 1.3758
Daily Pivot Point S1 1.3736
Daily Pivot Point S2 1.3683
Daily Pivot Point S3 1.3643
Daily Pivot Point R1 1.3828
Daily Pivot Point R2 1.3868
Daily Pivot Point R3 1.392




Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD slips to near 1.0450 ahead of Eurozone HICP and US ISM PMI

EUR/USD slips to near 1.0450 ahead of Eurozone HICP and US ISM PMI

EUR/USD has recorded a minor correction after hitting a high of 1.0489 on Thursday. The major is expected to remain on the sidelines as investors are awaiting the release of the US ISM PMI and eurozone Harmonized Index of Consumer Prices (HICP).


GBP/USD: Bears attack 1.2100 with eyes on yearly low, UK/US PMI

GBP/USD: Bears attack 1.2100 with eyes on yearly low, UK/US PMI

GBP/USD is nearing 1.2100, returning to bear’s radar, after a one-day absence. Brexit, politics and economic pessimism weigh on the pound in early Europe. Doubts over ‘partygate’ investigation take rounds, Irish deputy PM accuses No10 over NIP. UK/US PMIs eyed. 


Gold bears eye $1,787 as recession fears amplify ahead of US ISM PMI

Gold bears eye $1,787 as recession fears amplify ahead of US ISM PMI

Gold Price stands on slippery grounds as it slides to the lowest levels since early May, around $1,797 by the press time of early Friday morning in Europe. The yellow metal drops for the fifth consecutive day amid fears of escalating inflation and economic slowdown.

Gold News

Is this a buy signal for Shiba Inu price or month-end volatility?

Is this a buy signal for Shiba Inu price or month-end volatility?

Shiba Inu price embarked on a massive uptrend after bottoming on June 19. The ascent faced issues and headwinds, leading to an eventual retracement.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!