CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

GBP/USD, FTSE Forecast: Two trades to watch

Article By: ,  Senior Market Analyst
November 4, 2024 11:44 AM

GBP/USD rises ahead of a key week with election, BoE & Fed rate decisions

GBP/USD is inching higher amid a weaker USD and ahead of a busy week, with US elections and rate cuts expected from the Federal Reserve and the BoE.

The pound is rebounding after falling last week as the market digested Labor's budget, which brought with it higher taxes, borrowing, and investing. While the market lowered BoE rate cut expectations GBP still fell amid concerns over growth.

Attention will now turn to the Bank of England interest rate decision later this week. The central bank is expected to cut rates by 25 basis points, although the probability of this happening has lowered from last week. BoE governor Andrew Bailey is unlikely to guide for another rate cut this year.

Meanwhile, the US dollar is falling away from a three-month high in nervous trade ahead of tomorrow's election and Thursday's FOMC rate decision

As expectations of a Trump win have lowered on the Polymarket, and the US dollar is falling as the Trump trades unwind slightly.

Meanwhile, the Federal Reserve is expected to cut rates by 25 basis points on Thursday, marking the second straight rate cut after an outsized reduction in September.

Mixed data last week, including a hotter-than-expected core PCE and a weaker-than-expected nonfarm payroll report, haven't materially changed the outlook for the Federal Reserve, which is expected to continue gradually cutting rates.

Looking ahead, US factory orders will be released later today. They are expected to show that orders fell 0.4% Month over Month after falling 0.2% previously. The data will play second fiddle to the election nerves.

GBP/USD forecast – technical analysis

GBP/USD has recovered from a low of 1.2840, pushing back above 1.29 and the rising trendline dating back to mid-May. Buyers need to rise above the psychological level of 1.30 to negate the near-term downtrend. Above here, 1.31 comes into play.

Failure to rise above 1.30 keeps sellers in control, with 1.2840 and the 200 SMA at 1.2810 targets on the downside.

FTSE rises, boosted by energy stocks as OPEC+ delays production increases

The FTSE is gaining, outperforming its European peers, boosted by resource stocks, including Shell and BP, after OPEC delayed its increase in oil production.

OPEC+ agreed on Sunday to keep production cuts in place throughout December. Output had been due to increase by 180,000 barrels a day from next month; however, OPEC pushed back on plans to Increase production over fears of a supply glut, which has weighed on oil prices despite ongoing tensions in the Middle East.

This week's spotlight will be on the US elections, which are likely to influence global markets and could drive sentiment.

The FTSE will also be watching China's standing committee meeting, which is likely to impact the heavyweight mining sector on the FTSE. The meeting could provide more clarity on Chinese stimulus with a further $1.4 trillion worth of stimulus could be unveiled.

Frasers, JD Sports, and Anglo-American are leading the gains, with Shell and Lloyds not far behind.

On the broader 250 index, Burberry has risen almost 10% on reports that Italian Moncler is considering an acquisition offer for the luxury retailer.

FTSE forecast - technical analysis

The FTSE has recovered from the 200 SMA, pushing back above 8150 and back into a familiar range. Buyers will look to retake the 100 SMA at 8250. Above here, buyers will look to target 8325 ahead of 8400.

On the downside, support is at 8150 and below here the 200 SMA comes into play at 8100.

 

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024