The GBP/USD pair is currently stable on Monday in the North American session, holding steady at approximately 1.3088 as market participants anticipate the upcoming release of the UK’s budget, with the week being shortened due to the US Thanksgiving holiday. GBP/USD remains stable as market participants anticipate the UK Autumn Budget and assess the risks associated with a possible Japanese FX intervention. Fed’s Waller supports a rate cut in December, yet expresses uncertainty for January due to ongoing softness in the labor market. Significant US economic data is on the horizon prior to the commencement of the Fed’s blackout period.
The US Dollar maintains its strength, as illustrated by the US Dollar Index, which evaluates the currency’s performance relative to six other currencies. The DXY remains unchanged at 100.21, constrained by concerns regarding a potential Japanese intervention in the foreign exchange markets. Federal Reserve Governor Christopher Waller expresses support for a rate cut in December; however, the likelihood of a move in January remains uncertain. Waller stated, “Most of the private sector and anecdotal data that we’ve received indicates that nothing has really changed. The labor market exhibits signs of softness. It’s continuing to weaken,” said in an interview. Currently, there is a 60% expectation that the Federal Reserve may lower rates during the December meeting, influenced by the dovish remarks made by New York Fed President John Williams last Friday.
In addition, the US economic calendar will feature the ADP Employment Change 4-week average, the Producer Price Index, and Retail Sales on Tuesday. By Wednesday, Durable Goods Orders and Initial Jobless Claims may establish the groundwork prior to Fed officials commencing their blackout period. In the UK, traders are preparing for the upcoming release of the Autumn budget. Recently, Sky News disclosed that the Office for Budget Responsibility anticipates a decline in growth for 2026 and for each parliamentary year outlined in the budget. Chancellor Rachel Reeves is anticipated to increase taxes to address an expected £20-30 billion deficit in public finances, following the OBR’s revision of growth forecasts.
The technical analysis indicates that GBP/USD is currently trading in a sideways pattern, with a slight downward inclination. Buyers need to regain the recent cycle peak of 1.3215, which was reached on November 13. Current momentum indicates that bears continue to dominate, as illustrated by the Relative Strength Index. If GBP/USD dips beneath the November 20 low of 1.3037, it paves the way for a potential test of 1.30. A violation of the latter will reveal the daily low of 1.2707 from April 7. To achieve a bullish resumption, it is essential for traders to surpass 1.3100, subsequently targeting the 20-day SMA at 1.3134.