GBP/USD gained ground in European trading Monday, testing the 1.3200 mark as the US Dollar paused its recent recovery. Traders cited a mix of technical signals and fundamental developments, with the pair finding temporary support near the 1.3000 psychological level.
After slipping below its 200-day Simple Moving Average (SMA), the daily RSI moved out of oversold territory, hinting at a short-term bounce. Market watchers note that 1.3190—the weekly swing high—needs to be breached convincingly before the pair can target the 200-day SMA near 1.3275-1.3280, a key pivot for short-term traders.
- Immediate support: 1.3100–1.3085
- Key resistance: 1.3275–1.3280 (200-day SMA)
- Psychological floor: 1.3000, April low
On the downside, a failure to sustain gains could trigger a drop toward 1.2950, and eventually sub-1.2900 levels, as sellers press amid cautious sentiment.
US Dollar Pressured by Shutdown Fallout
The US Dollar remained under pressure after President Donald Trump signed a stopgap spending bill, ending the 43-day government shutdown—the longest in American history. Economists estimate the closure shaved 1.5–2.0% off quarterly GDP growth, while delayed jobs data signal ongoing weakness in the labor market.
These factors reduce demand for the Dollar, reinforcing a short-term bias toward USD selling. With government agencies reopening, long-delayed economic reports—including the September nonfarm payrolls—are expected this week, providing fresh insight into the US economy and influencing Fed policy expectations.
UK Data and Policy Keep Pound Cautious
In the UK, preliminary GDP figures showed 0.1% growth in Q3, down from 0.3% in the prior quarter and below estimates of 0.2%. September alone saw a 0.1% contraction, strengthening speculation that the Bank of England may cut rates next month.
Investors are also focused on upcoming fiscal details, with Chancellor Rachel Reeves set to unveil new tax measures on November 26. This uncertainty may cap GBP gains despite technical rebounds.
- Q3 UK GDP: 0.1%, down from 0.3%
- September monthly GDP: −0.1%
- BoE rate expectations: potential cut in December
Market participants will closely watch FOMC speeches and UK fiscal announcements for cues, while technical resistance and support levels provide a roadmap for short-term GBP/USD movements.