GBP/USD Forex Signal: Falls to 6-Month Low
2025-11-05 19:11:48
On Wednesday (November 5th) during the European session, the GBP/USD currency pair remained under pressure due to market expectations that the Federal Reserve would maintain current interest rates in December. Looking at the current intraday chart, GBP/USD exhibited a volatile pattern of initial decline followed by a rise and then a fall back. The intraday low reached around 1.3007, before rebounding and briefly rising to 1.3049 (an intraday increase of approximately 0.22%), but then quickly fell back, currently fluctuating around 1.3026, close to the intraday moving average (1.3024).
Fundamental analysis
The pound/dollar exchange rate is currently in a correction phase after a sharp drop yesterday. The dollar continues to strengthen as market expectations for another Federal Reserve rate cut in December cool. Several Fed officials have emphasized the need for caution regarding further easing policies.
The market currently estimates a 73.9% probability of a 25 basis point rate cut next month, down from about 90% before last week's Federal Reserve meeting. Kansas City Fed President Jeffrey Schmid pointed out that another rate cut may have a limited impact on employment, but could exacerbate inflation risks.
Meanwhile, the ongoing US government shutdown is causing delays in the release of key economic data. Today's market focus will be on the ADP private sector employment report, as well as manufacturing and services PMI data.
Technical Analysis
(GBP/USD 1-hour chart source: EasyForex)
The GBP/USD exchange rate is in a correction phase, remaining within a downward channel. After a round of sharp selling, the bears still hold the upper hand, and attempts to rally have been met with resistance near the 1.3055 level.
Today's GBP/USD forecast suggests a potential resumption of the downtrend. The stochastic oscillator further supports the bearish view – it has moved out of oversold territory, indicating that downward momentum will likely resume after a brief pullback.
The GBP/USD pair is currently exhibiting a strong bearish trend: the pound is one of the weakest currencies, while the dollar is one of the strongest. Prices are continuing their downward momentum, and the trend appears poised to extend to the $1.2700 level. Looking at the long-term chart, the current price area corresponds to the previous rapid rebound from the $1.2700 bottom; therefore, from a symmetry perspective, prices are highly likely to retrace to that level.
The stock market is currently in a sell-off phase, and the inflow of US dollar funds will not decrease.
The bearish logic is extremely strong, and the best trading opportunity today would be to establish a short position when the price touches the resistance level near $1.3033 and then pulls back.
The psychological level of $1.3000 may provide some support, but this support is unlikely to be significant. The main concern is that the price may not retrace to the expected level of $1.3033.
In any case, traders should clearly consider only shorting this currency pair today, as it is likely one of the most worthwhile currency pairs to trade today.
Long position trading advice
On the 1-hour (H1) timeframe, a long position can be established if a bullish price reversal occurs when the price next touches $1.2985 or $1.2931. The stop-loss should be placed one pip below the local low. When the trade reaches a 25-pip profit target, adjust the stop-loss to the break-even point. When the price reaches the 25-pip profit target, close 50% of the position to lock in profits, and hold the remaining position to pursue further gains.
Short selling advice
On the 1-hour (H1) timeframe, if a bearish price reversal occurs when the price next touches $1.3033, a short position can be established. The stop-loss should be placed one pip above the local high. When the trade reaches a profit of 25 pips, adjust the stop-loss to the break-even point. When the price reaches the 25-pip profit target, close 50% of the position to lock in profits, and hold the remaining position to pursue further gains.
Fundamental analysis
The pound/dollar exchange rate is currently in a correction phase after a sharp drop yesterday. The dollar continues to strengthen as market expectations for another Federal Reserve rate cut in December cool. Several Fed officials have emphasized the need for caution regarding further easing policies.
The market currently estimates a 73.9% probability of a 25 basis point rate cut next month, down from about 90% before last week's Federal Reserve meeting. Kansas City Fed President Jeffrey Schmid pointed out that another rate cut may have a limited impact on employment, but could exacerbate inflation risks.
Meanwhile, the ongoing US government shutdown is causing delays in the release of key economic data. Today's market focus will be on the ADP private sector employment report, as well as manufacturing and services PMI data.
Technical Analysis
(GBP/USD 1-hour chart source: EasyForex)
The GBP/USD exchange rate is in a correction phase, remaining within a downward channel. After a round of sharp selling, the bears still hold the upper hand, and attempts to rally have been met with resistance near the 1.3055 level.
Today's GBP/USD forecast suggests a potential resumption of the downtrend. The stochastic oscillator further supports the bearish view – it has moved out of oversold territory, indicating that downward momentum will likely resume after a brief pullback.
The GBP/USD pair is currently exhibiting a strong bearish trend: the pound is one of the weakest currencies, while the dollar is one of the strongest. Prices are continuing their downward momentum, and the trend appears poised to extend to the $1.2700 level. Looking at the long-term chart, the current price area corresponds to the previous rapid rebound from the $1.2700 bottom; therefore, from a symmetry perspective, prices are highly likely to retrace to that level.
The stock market is currently in a sell-off phase, and the inflow of US dollar funds will not decrease.
The bearish logic is extremely strong, and the best trading opportunity today would be to establish a short position when the price touches the resistance level near $1.3033 and then pulls back.
The psychological level of $1.3000 may provide some support, but this support is unlikely to be significant. The main concern is that the price may not retrace to the expected level of $1.3033.
In any case, traders should clearly consider only shorting this currency pair today, as it is likely one of the most worthwhile currency pairs to trade today.
Long position trading advice
On the 1-hour (H1) timeframe, a long position can be established if a bullish price reversal occurs when the price next touches $1.2985 or $1.2931. The stop-loss should be placed one pip below the local low. When the trade reaches a 25-pip profit target, adjust the stop-loss to the break-even point. When the price reaches the 25-pip profit target, close 50% of the position to lock in profits, and hold the remaining position to pursue further gains.
Short selling advice
On the 1-hour (H1) timeframe, if a bearish price reversal occurs when the price next touches $1.3033, a short position can be established. The stop-loss should be placed one pip above the local high. When the trade reaches a profit of 25 pips, adjust the stop-loss to the break-even point. When the price reaches the 25-pip profit target, close 50% of the position to lock in profits, and hold the remaining position to pursue further gains.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
