UK House Prices Resume Decline As BOE Lowers Rates, GBPUSD Breaks Below 1.26
GBPUSD pierced below 1.26 last week as the decline escalated on hawkish FED comments and weaker economic data from the UK, with only the 100 weekly SMA being the last line of support before heading to 1.23.
In October, the GBP/USD pair saw a sharp downturn, dropping 6 cents as renewed strength in the U.S. dollar erased earlier gains that had pushed the pair above 1.34 earlier in the year. The decline initially found support at the 100-day Smooth Moving Average (red), which held firm during the first half of November.
However, disappointing UK economic data has since weighed heavily on the pair. UK labor market figures revealed a rise in the unemployment rate, while the September monthly GDP contracted by -0.1% against expectations of a +0.2% increase. Additionally, the services sector stagnated at 0.0%, missing the forecasted +0.2%, while manufacturing output fell by -1.0%, and industrial production declined by -0.5%.
GBP/USD Chart Daily – Testing the 100 SMA
These weak data points, combined with hawkish statements from the Federal Reserve signaling caution around rate cuts, further bolstered the USD and triggered a bearish breakout for GBP/USD, threatening additional downside momentum. Powell signaled a slower pace of rate cuts on Thursday last week, then all other FOMC members followed suit, leading to a decline in markets odds for the December rate cut.
UK Rightmove House Price Index for November
GBP/USD Live Chart
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