GBP/USD maintains a bullish bias near 1.3450 as investors weigh a hawkish BoE against US economic data risks, with the pair eyeing a breakout above the 1.3470 Fibonacci resistance level.
The pair is up 0.05% near 1.3450, supported by a BoE rate hike with signals of more and a UK Budget seen easing fiscal-crisis risk, while falling US yields and an over 10% weekly oil drop cap the dollar. Traders are holding back ahead of the US NFP report, which will set expectations for a December Fed move and could swing the pair either way.
Traders are hesitant to place aggressive bets ahead of the US monthly employment report (NFP), which will drive expectations for the Fed's December decision; spot is only up 0.05% around 1.3450.
Support sits at the 200-day SMA at 1.3421, the 50.0% Fib at 1.3406 and the 38.2% level at 1.3343; a clear break above the 61.8% Fib at 1.3470 opens the way to 1.3560 and then the August swing high at 1.3674.
US bond yields have slid to a near two-month low after Democrats' midterm victory raised gridlock and slower-growth expectations and an over 10% weekly oil plunge eased inflation concerns. Lower yields weaken the dollar's yield appeal, supporting GBP/USD, though Friday's NFP could reverse the move.
The midterm election result pointing to political gridlock and lower government spending, plus an over 10% weekly drop in crude oil that eases inflation concerns, have dragged yields to a near two-month low.
The GBP/USD pair trades near 1.3450, supported by a hawkish Bank of England and easing fiscal concerns. Traders remain cautious ahead of the US Nonfarm Payrolls report, which will dictate the Federal Reserve's December policy path. While the pair faces resistance at 1.3470, the broader technical outlook remains constructive above the 200-day moving average.
Traders are hesitant to place aggressive bets ahead of the US monthly employment report (NFP), which will drive expectations for the Fed's December decision; spot is only up 0.05% around 1.3450.
Support sits at the 200-day SMA at 1.3421, the 50.0% Fib at 1.3406 and the 38.2% level at 1.3343; a clear break above the 61.8% Fib at 1.3470 opens the way to 1.3560 and then the August swing high at 1.3674.