- GBP/USD pops on U-turn budget speculation with daily resistance eyed.
- Eyes turn to US CPI as the main event for the week.
GBP/USD has rallied in recent trade ahead of the US inflation data at the top of the hour. At the time of writing, GBP/USD is trading at 1.1250 and popped 1.1299 amid more positive UK political noise. There are reports that there could be a UK budget U-turn with Tuss advocating raising corporation tax. Sky News reported that talks are underway over whether to reverse parts of the mini-budget although chancellor Kwasi Kwarteng has been reiterating his tax-cutting agenda.
Meanwhile, the Bank of England confirmed on Wednesday it's emergency bond-buying scheme will end on Friday as expected. However, the Financial Times reported that the central bank has signalled privately to bankers that it could extend its emergency bond-buying programme, raising some confusion among investors. Either way, volatility is back in the binds and the long-dated UK gilt prices have rallied sharply, pushing yields down by as much as 42 basis points to 4.476%, easing back from 20-year highs struck on Wednesday.
Looking ahead, the US Consumer Price Index will be the driver for the immediate future, the main data release of the week. ''We expect the headline to print relatively low at 0.2% MoM in line with consensus, as gasoline prices continued to decline during September,'' analysts at Danske Bank said. ''For core, we continue to see modest upside risks to the consensus expectation, and forecast a rise of 0.5% MoM (consensus 0.4% MoM).''
GBP/USD technical analysis
September's high of 1.1736 is on the radar for the bulls on a break of the daily resistance. However, a strong inflation report from the US could see the greenback surge, and that means the recent supports and daily, and weekly lows will be eyed with a focus on 1.1050 first and then 1.0920s.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD faces the next hurdle at 0.6400
AUD/USD rose markedly and approached the key 0.6400 hurdle at the beginning of the week, always in response to rising weakness in the US Dollar and hopes of fresh stimulus in China.
EUR/USD keeps the upside target at 1.1000
EUR/USD extended further Friday’s recovery and traded at shouting distance from the YTD peaks near 1.0950 in response to increased selling pressure in the Greenback and the improved political scenario in Germany.
Gold consolidates around $3,000 ahead of Fed
Gold prices has started the week on a positive tone and maintains their trade around the key $3,000 mark per troy ounce on the back of the modest pullback in the Greenback and mixed US yields across the curve,
Crypto markets could gain $1 trillion as Gold price reaches $3,000: Tokenized-Gold expert explains
Tokenized-Gold assets hit a $1.8 billion market cap on Monday after the Gold (XAU) price marked new all-time highs above $3,000 per troy ounce. In an exclusive interview with FXStreet, RAAC CEO Kevin Rusher explains how tokenized Gold assets could impact the next crypto market recovery phase.
Five Fundamentals for the week: Fed leads central bank parade as uncertainty remains extreme Premium
Central bank bonanza – perhaps its is not as exciting as comments from the White House, but central banks still have sway. They have a chance to share insights about the impact of tariffs, especially when they come from the world's most powerful central bank, the Fed.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.