- The dollar eased slightly on Tuesday as traders awaited crucial data.
- The US economy might expand by 3.0% in Q3.
- Economists expect the nonfarm payrolls report to show an addition of 111,000 jobs in October.
The GBP/USD outlook shows a pause in the decline as market participants await key US economic data and the US presidential election. Meanwhile, the pound recovered as traders adjusted to the Bank of England’s more cautious stance.
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The dollar eased slightly on Tuesday as traders awaited crucial data. Nevertheless, it has had a strong month due to better-than-expected US economic data and the looming US presidential election. The US economy has shown resilience despite high interest rates. Consumer spending has remained high, and the labor sector has shown solid demand. This week, market participants are awaiting crucial employment and GDP data.
According to estimates, the US economy might expand by 3.0% in Q3, holding after a similar expansion in the previous quarter. Meanwhile, economists expect the nonfarm payrolls report to show an addition of 111,000 jobs in October. Such an outcome would indicate a slowdown in job growth from the previous month.
A better-than-expected employment report will further propel the dollar, leading to a decline in GBP/USD. On the other hand, if the labor market weakens, it could raise Fed rate cut expectations, weakening the dollar.
Meanwhile, next week’s US presidential election will likely cause a lot of turmoil. The race is tight, meaning the outcome will increase market volatility. Furthermore, the dollar has rallied every time bets have supported a Trump presidency. Therefore, if he wins, the greenback might rally.
Meanwhile, the pound recovered on a cautious Bank of England policy outlook. Policymakers like Andrew Bailey and Catherine Mann expressed caution regarding inflation last week, hurting rate-cut expectations.
GBP/USD key events today
- CB Consumer Confidence
- JOLTS Job Openings
GBP/USD technical outlook: Bulls attempt takeover above the 30-SMA
On the technical side, the GBP/USD price is trading above the 30-SMA, a sign that bulls are challenging the downtrend. At the same time, the RSI trades above 50, supporting bullish momentum.
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Bulls are attempting a takeover after the downtrend lost steam and the RSI made a bullish divergence. However, the new move faces strong resistance at the 1.3000 level. A break above would confirm a shift in sentiment, with the next target at the 1.3100 level.
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