GBPUSD, Gold Analysis: Market Uncertainty Pressures the Pound and Boosts Metals

Key Events for the Week Ahead

UK Claimant Count Change (Tuesday)
UK CPI (Wednesday)
US Retail Sales (Thursday)
BOE Monetary Policy Report Hearings (Thursday)
UK Retail Sales (Friday)

The latest US CPI results have strengthened expectations for a 25bps Fed rate cut following the positive non-farm payroll data. The drastic easing expectation by the markets has faded given the stability of the US Dollar Index right below the 103-mark. With economic uncertainty reentering the play alongside that of US elections and Geopolitical tensions, both the US Dollar Index and Gold remain on bullish grounds.

As for the British Pound, after retesting the 1.3450 barrier (the 2009 low), the pressure between the BOE and the DXY has pushed the GBPUSD back towards the 1.30 zone, which aligns with the upper boundary of the 15-year consolidation range. With the BOE signaling a more aggressive easing cycle and the Fed likely taking a less aggressive stance, the GBPUSD is under notable pressure.

Next week could bring further volatility with key UK economic data, including claimant count change, which saw a sharp improvement in August (from 102.3k to 23.7k), the UK CPI, which has stabilized around the central bank's target between 2-2.2%, and BOE Monetary Policy Report Hearings.

Technical Analysis

GBPUSD Analysis: Monthly Time Frame – Log Scale

Source Trading view

The GBPUSD has rebounded from the 0.236 Fibonacci retracement level (1.3434) of the downtrend between 2007 and 2022. The pair is currently retesting the upper boundary of the 15-year consolidation range at the 1.30 support level.

Given the strength of this support, a potential rebound could push the pair back towards the 1.3430 high. A close above this level could open the door for a move towards the 1.37 zone. On the downside, falling back inside the consolidation below 1.30 could lead to support at 1.2870 and 1.2730.

Gold Analysis: 3Day Time Frame – Log Scale

Source: Tradingview

Gold recently corrected from its 2685 record high, finding support at the trendline connecting the consecutive highs of July and August 2024 at the 2603 low. With rising uncertainties around monetary policies, US elections, and geopolitical tensions, alongside strong technical support from the primary uptrend channel, gold’s overall outlook remains positive.

A close above the 2685 high would align gold with further targets at 2760, 2800, 2890, and 3000. On the downside, a break below 2580 could increase selling pressure, leading to further declines toward 2520 and 2480, signaling a potential shift in sentiment.

--- Written by Razan Hilal, CMT on X: @Rh_waves

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.