News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Traders in the Euro have a big decision to make this weekend: if EUR/USD hits 1.20, will it continue to advance, consolidate or fall back? Get your $EURUSD market update from @MartinSEssex here:https://t.co/8hAhguZcEA https://t.co/kwtatozp3z
  • The bullish engulfing candle is one of the forex market's most clear-cut price action signals for reversals and continuation. Learn more about this price action trading signal here: https://t.co/Yg6ecRZZNr https://t.co/9SdceNYUEK
  • The bull flag pattern is a great pattern to add to a forex trader's technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/yOEvLjKnct https://t.co/imv2PnapzH
  • Defensive stocks have proven critically important when navigating stock market volatility. Find out what are the most defensive stocks here:https://t.co/TMcbMALtbw https://t.co/mmldxxEtsc
  • Dollar Index has broken major uptrend support and risks accelerated losses into the December open. Get your $USD technical analysis from @MBForex here:https://t.co/Txo8l8S1f1 https://t.co/YLVzP95JH8
  • The MACD is an indicator that uses exponential moving averages (EMA) to determine trend strength along with entry points based on crossovers. Find out how you can use the MACD as a buy/sell signal here: https://t.co/qxnP99uqTQ https://t.co/tGVqSZ2zK3
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/reMoYpqkQO
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/sqeRL7Rf7u
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/ukOW0dWJxf
  • Beautifully put. https://t.co/0fBsmUH6Pb
GBP/USD Latest: Rattled by US Election Uncertainty, Final UK PMIs Disappoint

GBP/USD Latest: Rattled by US Election Uncertainty, Final UK PMIs Disappoint

2020-11-04 12:00:00
Nick Cawley, Strategist
Share:

Brexit and GBP/USD Price, Analysis and Chart:

  • US election outcome remains unclear.
  • UK economy ‘seems on course for a double-dip recession’.
  • GBP/USD buffeted by US dollar volatility.
Advertisement

The outcome of the US election continues to be cloudy with sentiment swinging one candidate to another as the votes are counted. As we stand former vice president and Democrat Joe Biden is expected to just win the election although incumbent Donald Trump has already said that he would go to the Supreme Court in order to stop the counting of postal votes in an effort to shore up a victory. The US dollar has been whip-sawed in a one-point range today as sentiment turned from one candidate to the other, leaving USD-pairs at risk of further volatile moves.

Sterling received a knock-back earlier in the session when the final Markit PMIs showed that the UK service sector recovery slowed sharply in October. The data revealed that the UK service sector was close to stalling even before the announcement of lockdown 2.0 in England. According to Tim Moore at IHS Markit, ‘November’s lockdown in England and a worsening Covid-19 situation across the rest of Europe means that the UK economy seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021’.

GBP/USD Latest: Rattled by US Election Uncertainty, Final UK PMIs Disappoint

Ahead tomorrow, the latest UK quarterly inflation report and the Bank of England monetary policy report with the central bank likely to announce an increase in the UK bond-buying program (QE) of up to GBP100 billion.While the increase in the bond-buying program has been mooted for some weeks now, the latest data and national lockdown will have forced the central bank’s hand.

GBP Forecast
GBP Forecast
Recommended by Nick Cawley
Download our New Q4 Sterling Forecast
Get My Guide

Brexit talks are likely to continue over the weekend, according to media reports, with both sides recognizing that while progress has been made, a lot more work needs to be done if an agreement is to be reached. If talks do continue next week, Sterling may pick up a small relief bid.

GBP/USD is currently trading either side of 1.3000 after having hit a high of 1.3142 and a low of 1.2912 in today’s session so far, with the move entirely driven by US dollar volatility. It would be best to stay on the sidelines until the outcome of the US election is known.

GBP/USD Daily Price Chart (January – November 4, 2020)

GBP/USD Latest: Rattled by US Election Uncertainty, Final UK PMIs Disappoint
GBP/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -10% -13% -12%
Weekly 13% -6% 0%
Learn How to Use Sentiment in Your Trading Strategy
Get My Guide

IG client sentiment data show46.53% of traders are net-long with the ratio of traders short to long at 1.15 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise.Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/USD-bullish contrarian trading bias.

Traders of all levels and abilities will find something to help them make more informed decisions in the new and improved DailyFX Trading Education Centre

What is your view on Sterling – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES