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GBP to USD Forecast: US Consumer Confidence and BoE and Fed Speakers in Focus

By:
Bob Mason
Updated: Nov 28, 2023, 03:32 UTC

Sterling's rise to $1.26XXX dissected: Bank of England's Bailey, US consumer confidence, and market dynamics under the spotlight.

GBP to USD Forecast

Highlights

  • The GBP/USD gained 0.25% on Monday, ending the session at $1.26265.
  • Hawkish Bank of England commentary countered risk aversion on Monday.
  • On Tuesday, BoE commentary, Fed speakers, and US consumer confidence are focal points.

The Monday GBP/USD Overview

On Monday, the GBP/USD gained 0.25%. Following a 0.50% rise on Friday, the GBP/USD ended the day at $1.26265. The GBP/USD fell to a low of $1.25909 before rising to a Monday high of $1.26441.

Bank of England Speakers in Focus

On Tuesday, Bank of England commentary will garner investor interest. BoE Governor Andrew Bailey and Monetary Policy Committee Member Jonathan Haskel are on the calendar to speak.

BoE Governor Andrew Bailey continues to pour cold water on rate cut discussions. Recent UK economic indicators support the more hawkish rate path outlook. Further affirmations of a higher-for-longer rate path would continue to support the buyer appetite for the GBP/USD.

However, MPC Member Jonathan Haskel must hint at a similar outlook to avoid policy uncertainty impacting the GBP/USD. Haskel could have plenty to say about inflation. The MPC member will deliver a speech at Warwick University on ‘UK inflation: how did we get here and where are we going.’

There is no UK economic data for investors to consider on Tuesday.

US Consumer Confidence and the Fed in Focus

On Tuesday, US consumer confidence will be in focus. A larger-than-expected decline in consumer confidence would impact buyer demand for the US dollar. A weaker consumer confidence backdrop could signal a pullback in consumer spending. Downward trends in consumer spending could ease demand-driven inflation and the need for a hawkish Fed rate path.

However, a marked decline in consumer confidence could reignite fears of a hard landing. US Private sector consumption contributes over 60% to the economy.

Economists forecast the CB Consumer Confidence Index to fall from 102.6 to 101. Sub-100 would send a gloomy outlook for consumption.

Other stats include US house price numbers. However, these will likely play second fiddle to the consumer confidence numbers.

With consumer confidence in focus, investors must monitor Fed speakers. FOMC members Barr, Bowman, Goolsbee, and Waller are on the calendar to speak.

Short-Term Forecast

Near-term trends for the GBP/USD remain hinged on US inflation and Bank of England forward guidance. Softer US inflation numbers and dovish Fed comments could support the GBP/USD move to $1.27. BoE Governor Andrew Bailey continues to pour cold water on rate cut discussions.

GBP to USD Price Action

The Weekly Chart sends mixed price signals.
GBPUSD 281123 Weekly Chart

Daily Chart

The GBP/USD remained above the 200-day and 50-day EMAs, affirming bullish price signals.

A GBP/USD move through $1.26500 would give the bulls a run at the $1.28013 resistance level.

US consumer confidence and central bank speeches are focal points on Tuesday.

However, a GBP/USD fall through the $1.26 handle would support a fall toward the $1.24410 support level.

The 14-period daily RSI reading of 69.03 indicates a GBP/USD move to $1.26500 before entering overbought territory.

GBP to USD Daily Chart sends bullish price signals.
GBPUSD 281123 Daily Chart

4-Hourly Chart

The GBP/USD sat above the 50-day and 200-day EMAs, reaffirming bullish price signals.

A breakout from $1.26500 would bring the $1.27 handle into play.

However, a fall below the $1.26 handle would bring the 50-day EMA and the $1.24410 support level into view.

The 14-period RSI on the 4-hour Chart at 70.13 shows GBP/USD in overbought territory. Selling pressure could intensify at $1.26500.

GBP to USD 4-Hourly Chart EMAs affirm bullish price signals.
GBPUSD 281123 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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