GBP/USD still points to further consolidation – UOB

Pablo Piovano FXStreet

Cable is likely to prolong the current consolidative theme in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as GBP staged a strong advance and hit a high of 1.3235. The up-move is running ahead of itself and from here, we see slim odds for GBP breaking above the 1.3235 high. That said, it is too early to expect a sustained pullback. GBP is more likely to consolidate its gains and trade sideways, likely within a 1.3140/1.3225 range”.

Next 1-3 weeks: “GBP moved above the top of our previously expected 1.3040/1.3220 range yesterday as it briefly hit a high of 1.3235. Despite the overall positive price action, we continue to view the current movement as part of a sideways consolidation range and we have doubts about the sustainability of further short-term GBP strength. That said, GBP could probe last week’s top near 1.3260 but at this stage, we view any advance as part of a higher 1.3080/1.3260 range and not the start of a sustained up-move”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD climbs toward 0.7000 after strong China data dump

AUD/USD attracts follow-through buyers for the second straight day on Monday, extending last week's recovery toward 0.7000 in Monday's Asian trading. Strong Chniese Q3 GDP and activity data for September strengthen the pair's advance, following RBA Assistant Governor Chris Kent's hawkish remarks.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold rangebound as easing October Fed bets clash with firm December hike pricing

Gold attracts some buyers at the start of a new week, though it lacks bullish conviction and remains below the $4,200 mark. US Federal Reserve Chair Kevin Warsh’s unwillingness to provide any cues on further policy moves led to a reduction in odds for policy tightening later this month. Moreover, the recent sharp retracement slide in US government bond yields from multi-year highs, which dragged the US Dollar to a two-week low, acts as a tailwind for the bullion.

Cardano risks 15% downside as retail demand, bullish momentum wane

Cardano (ADA) is trading above $0.2200 at press time on Monday, holding steady after a 12% decline the previous week. The altcoin is losing retail interest as the notional value of active ADA futures positions declines. The technical outlook for ADA suggests a downside bias following the bearish breakout below a near-term support trendline last week.

What to expect in the week ahead

Investors are still digesting last week’s price action as we start a new week. US stocks sold off sharply, with the Swiss and UK indices attracting inflows as tech sold off. Sovereign bonds, particularly Treasuries, rallied and acted as a safe haven as the AI trade suffered another bout of volatility.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.