- The BoE's rate hike saw limited buying for the GBP/USD as the central bank warns of a slower rate of hikes looking forward.
- Friday's market focus is drifting towards the US Non-Farm Payrolls report.
The GBP/USD is trading just above the 1.30 major technical level after seeing a familiar sell-off pattern on Thursday.
The Bank of England (BoE) hiked their interest rate by 25 bps, but the Sterling still took a nose dive after the BoE's Governor Mark Carney suggested that the pace of future rate hikes will be incredibly slow, with the BoE projecting to engage in further rate increases around once a year. Pound traders took the rate of future hikes as a bearish sign, sending the GBP/USD sharply lower for Thursday after sending the pair into 1.3125 on reaction to the 25 bps rate hike.
Brexit concerns are also dragging on the Sterling, with EU-UK trade deal negotiations set to begin anew in a couple of weeks with UK Prime Minister Theresa May personally heading up trade negotiations, to the chagrin of her fractured ruling party within the UK parliament, with hard-line Brexiteers likely to reject any initial offers from the EU amidst calls that PM May is too willing to bow to European demands.
Friday sees the Markit Services PMI for the GBP at 08:30 GMT, forecast to come in at 54.7 versus the previous showing of 55.1, though the mid-tier indicator will be largely overshadowed by the US NFP job report, which drops on markets at 12:30 GMT to cap off a disappointing week for the Pound.
GBP/USD levels to watch
Momentum is leaning firmly towards the downside on the Sterling-Dollar pairing, and as FXStreet's own Valeria Bednarik noted, a break of the 1.3000 level will be seeing a dramatic selloff as the GBP/USD extends its current declines: "technically, the GBP/USD pair is biased lower, with room to break below the key 1.30 threshold, given that in the 4 hours chart, it is developing well below a bearish 20 SMA, while the Momentum indicator heads firmly lower within negative territory, as the RSI tries to stabilize around 29."
Support levels: 1.3010 1.2970 1.2925
Resistance levels: 1.3045 1.3085 1.3120
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD extends decline toward 1.0500 after US data
EUR/USD came under renewed bearish pressure and declined toward 1.0500 in the second half of the day on Monday. After the data from the US showed that the ISM Manufacturing PMI came in better than expected in September, the US Dollar extended its rally and weighed on the pair.
GBP/USD falls below 1.2150 as USD rally continues
GBP/USD turned south and retreated to a fresh daily low below 1.2150 in the American session. The US Dollar continued to gather strength against its rivals after the better-than-expected ISM September Manufacturing PMI data and forced the pair to stay on the back foot.
Gold falls to fresh multi-month lows near $1,830
Gold price turned south and dropped to its weakest level since early March near $1,830. The benchmark 10-year US Treasury bond yield gained traction on upbeat US PMI data and was last seen rising nearly 2% on the day above 4.6%, causing XAU/USD to stretch lower.
Week ahead: Fed speech and NFP likely to dictate crypto market moves this week
With the start of 2023’s fourth quarter, things are finally getting interesting in crypto. While the next 12 weeks are extremely important, let’s start by focusing on what to expect this week.
ISM Manufacturing PMI Preview: Worst for US factory activity could be over
The ISM will publish the United States September Manufacturing PMI today. The index is expected to have ticked modestly higher to 47.7 from its previous monthly reading of 47.6.