GBP/USD Upbeat Ahead of Key UK Data and the Autumn Statement
GBP/USD Analysis
Markets brace for a series of economic data and events from the Old Albion over the coming days, which have the potential to spur volatility and determine the trajectory of the British Pound. The UK government is expected to provide an update on its economic plan with the Autumn Statement on Thursday, after September's mini-budget debacle by the former PM, which roiled financial markets.
CPI Inflation stood at 10.1% in September and forty-year highs, with the October figures due on Wednesday, while the Bank of England projects it to peak at around 11% this quarter [1]. Today's jobs report showed that wage inflation grew, as average weekly earnings (excluding bonuses) in the July-September period rose 5.7%, from 5.5% previously, while Unemployment ticked up to 3.6%.
According to preliminary data from Friday, the UK economy contracted by 0.2% q/q in the third quarter, with the central bank forecasting a prolonged recession.
GBP/USD comes from its best week in over two years, helped by the soft CPI Inflation report form the US, which led to an easing of market expectations around the Fed's rate-hike path and a decline in the greenback.
It has recovered by around 15% from the September record lows (1.0356) and is upbeat today, above the 38.2% Fibonacci of the 2022 high/low slump. It looks like it has the technical room to contest the 50% Fibonacci and the 200Days EMA in the 1.2052-1.2110 region, but it early to talk about a broader advance towards and beyond 1.2407-53.
Despite the impressive recovery, the US Fed is more aggressive than the Bank of England and Chair Powell pointed to a higher terminal rate than previously expected, even if the pace of hikes slows down [2]. GBP/USD shows some indecision at the start of the week and is susceptible to downward pressure. The 1.1440-1.1330 area though, contains a confluence of supports and catalyst would be required for a breach that would expose the pair to 1.0960-22.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 15 Nov 2022 https://www.bankofengland.co.uk/monetary-policy-report/2022/november-2022 | |
| Retrieved 19 Apr 2026 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20221102.htm |
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