Market Analysis

GBP/USD Steady as Traders Await U.S. Election Results and Central Bank Decisions

Dupoin · 05 Nov 202443.3K Views

GBPUSD

Prediction: Decrease

Fundamental Analysis:

The GBP/USD pair is holding steady around 1.2950 in early Asian trading on Tuesday, with traders closely monitoring the outcome of the U.S. presidential election. Later this week, attention will turn to key monetary policy decisions from both the Bank of England and the U.S. Federal Reserve.

GBP/USD opened the week on a positive note, showing gains towards 1.3000 after ending a five-week losing streak. This rise is partly attributed to a weaker U.S. Dollar, driven by election-related uncertainty. Betting site PredictIt currently suggests a slight edge for Kamala Harris, giving her a 51% probability of victory over Donald Trump, marking her first lead since early October.

U.S. stock index futures are mixed, reflecting a cautious sentiment among investors who may be waiting for more clarity from the election. If U.S. stocks experience selling pressure at the market open, it could limit further gains for GBP/USD.

Technical Analysis:

On the 4-hour chart, the Relative Strength Index (RSI) is hovering slightly above 50, indicating mild bullish sentiment, though GBP/USD is struggling to maintain a position above 1.2980, where the 100-day Simple Moving Average is situated, showing buyer hesitation.

If 1.2980 continues to act as resistance, key support levels to watch include 1.2940, followed by 1.2900. Conversely, if GBP/USD stabilizes above 1.2980, it could encounter resistance at 1.3000, with a further target at 1.3040 if upward momentum persists.

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