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The AUD/USD pair jumps 0.56% to near 0.6530 during the European trading session on Monday.

The AUD/USD pair jumps 0.56% to near 0.6530 during the European trading session on Monday.

Pound Sterling (GBP) is likely to trade in a range between 1.3105 and 1.3175. In the longer run, GBP’s weakness has come to an end; it could recover further, but any advance is likely part of a higher range of 1.3050/1.3220, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Pound Sterling (GBP) is likely to trade in a range between 1.3105 and 1.3175. In the longer run, GBP’s weakness has come to an end; it could recover further, but any advance is likely part of a higher range of 1.3050/1.3220, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

San Francisco Fed President Mary Daly said the FOMC has appropriately reduced policy rates by a total of 50bps this year as part of a “prudent risk management approach”, noting that the adjustments provide “needed insurance” for the labor market while keeping policy “modestly restrictive” to further curb inflation. In an essay published today, Daly […]

The post Fed’s Daly: Policy must avoid trading one mistake for another appeared first on Action Forex.

• Restrictive policy is putting downward pressure on inflation
• Tariffs effects are largely confined to goods
• Inflation expectations still relatively well anchored

She’s clearly erring on the dovish side and would vote for a rate cut in December if she could. She’s not a voter until 2027 though. There are 12 voting members in the FOMC and right now we can safely say that 3 will vote for a cut and 3 will vote for a hold. The rest will decide based on the data ahead of the next meeting in December.

This article was written by Giuseppe Dellamotta at investinglive.com.

Fundamental
Overview

The USD has weakened pretty
much across the board last week despite a strong US ADP and ISM Services PMI. As mentioned previously, when
markets react like that it’s generally a signal of a short-term top with the
market needing more to keep the trend going.

In fact, the market pricing
is now showing a 63% probability of a December cut, which is about right. The
NFP and CPI reports will have the final say, and hopefully we will get them
before the next FOMC decision.

On the GBP side, the BoE
held the Bank Rate steady with a 5-4 vote split as BoE’s Breeden joined the
doves and voted to cut rates by 25 bps. The first reaction was dovish as pretty
much everything suggested that a rate cut in December was almost a sure thing.

In the press conference
though, BoE Governor Bailey sounded like a December cut was conditional on a
confirmation of the improvement in inflation. The BoE will get two employment
and inflation reports before the next meeting, so they will have enough data to
make a better decision. The market is currently pricing a 57% chance of a rate
cut in December.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD pulled all the way back to the key 1.3140 level, with the price
eventually breaking above it. This is where the buyers are expected to increase
the bullish bets into the major trendline around the 1.3250 level. The sellers,
on the other hand, will want to see the price falling back below the 1.3140
level to pile in for a drop into new lows or alternatively, wait for the price
to come into the trendline to short with a better risk to reward setup.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current pullback. The
buyers will likely continue to lean on the trendline to keep pushing into new
highs, while the sellers will look for a break lower to start targeting new
lows.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the buyers will look for longs around the
trendline and the 1.3140 level, while the sellers will want to see the price
breaking lower to pile in for new lows. The red lines define the average daily range for today.

Upcoming Catalysts

This week is pretty empty on the data front. Tomorrow, we have the UK employment
report and the weekly US ADP data, while on Thursday we get the UK GDP report.

This article was written by Giuseppe Dellamotta at investinglive.com.

The risk mood is staying buoyed in European trading and is set to carry over to US trading later as well. The big news since the end of last week is that we might finally get to see the end of the US government shutdown. And that hope and possibility is helping to feed the fuel in markets to start the new week.

On the one hand, we might get to see US economic data again and that could expose further labour market vulnerabilities. In turn, that will likely increase odds of the Fed cutting rates sooner rather than later as opposed to the plausible meandering with tariffs inflation still in the picture as well.

But also, the end of the shutdown will help to alleviate funding/liquidity pressures – as noted here. And that is a negative drag on the dollar at the balance while also helping to bolster risk appetite among investors.

So far to start the week, we’re seeing a broad rally in risk trades with US futures up and Bitcoin also up 1.4% to $106,181 currently. The latter managed to stave off a break under $100,000 and that’s also keeping dip buyers well interested.

Besides that, gold is also starting to see dip buying appetite come into play as price is up 2% to $4,079 and hitting fresh two-week highs.

This article was written by Justin Low at investinglive.com.

EUR/USD trades around 1.1560 on Monday at the time of writing, virtually unchanged on the day. The US Dollar (USD) finds renewed support following Bloomberg reports that a group of centrist Senate Democrats agreed to back a deal to end the US government shutdown.