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by The GBP/USD currency pair dipped to its lowest point in nearly a month, falling below $1.311. This significant decline was driven by the market’s anticipation of more noticeable rate reductions by the Bank of England in November.
Diverging Opinions Among BoE Leaders
The Bank of England’s leadership appears divided on the approach to interest rates. Governor Andrew Bailey has hinted at adopting a more dynamic and forceful strategy in rate adjustments.
In contrast, Chief Economist Huw Pill has recommended a more measured and cautious approach, highlighting the complexity of economic forecasts and the need for prudence.
U.K. Construction Booms
Despite the gloom in currency markets, the U.K.’s construction sector is experiencing a robust expansion, the most vigorous over two years. This growth reflects a resilient part of the economy amid broader financial uncertainties.
As the U.K. braces for its upcoming budget announcement on October 30, mounting concerns over potential reductions in public spending and increases in taxes are emerging. These fiscal adjustments could influence economic stability in the coming months.
Additionally, a robust employment report from the U.S. has somewhat dampened expectations for a substantial rate cut from the Federal Reserve, affecting global market sentiments.
GBPUSD Fundamental Analysis – 7-October-2024
GBPUSD Fundamental Analysis – 7-October-2024
FxNews—The GBP/USD pair trade in a bear market. Meanwhile, the Stochastic Oscillator hovers below the 20 line, signaling the market is oversold. However, the Awesome oscillator shows bullish momentum with green bars approaching the signal line from below.
The critical support level is at 1.304. If this level holds, the British pound can potentially erase some of its loss against the American currency. In this scenario, the GBP/USD price could rise and rest the 1.326 resistance, backed by the 100-period simple moving average.
Conversely, a new downtrend will likely be triggered if the GBP/USD price falls below the immediate support. In this scenario, the bearish wave from 1.343 will likely extend to the next resistance area at 1.30. (Source FxNews—GBP/USD Analysis).
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