• The US economy expanded by 2.8%, below estimates of 3.0%.

• The US reported dismal job growth in October.

• Market participants will focus on the Bank of England policy meeting.

The GBP/USD weekly forecast supports further downside with the looming BoE rate cut and the US presidential election.

Ups and downs of GBP/USD

The pound had a slightly bearish week as the dollar fluctuated amid mixed economic reports. The US economy expanded by 2.8%, below estimates of 3.0%. The weaker-than-expected economic performance temporarily weighed on the dollar.

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Another report on Thursday revealed that inflation accelerated by 0.3%, meeting forecasts. Meanwhile, on Friday, the US reported dismal job growth. The economy only added 12,000 jobs compared to estimates of 106,000. Meanwhile, the unemployment rate held steady at 4.1%. The dollar initially sunk but recovered before the day ended as focus shifted to the upcoming presidential election.

Next week’s key events for GBP/USD

Next week, market participants will focus on the Bank of England policy meeting on Thursday. According to a Reuters poll, the central bank will likely cut borrowing costs by 25-bps. Notably, inflation in the UK has eased below the 2% target, putting more pressure on policymakers to cut rates. However, economists believe this might be the last rate cut for the year.

Similarly, the Federal Reserve might cut rates by 25-bps on the same day. Recent data from the US has shifted the outlook for Fed rate cuts to a more gradual pace. Nevertheless, market participants will pay attention to messaging for future policy moves. Furthermore, the US will release data on initial jobless claims and nonfarm productivity.

GBP/USD weekly technical forecast: Lower low strengthens bearish bias

On the technical side, the GBP/USD price has broken below and retested the 1.3002 key level. With this move, bears have confirmed a new downtrend by breaking below the previous low to make a lower low. The reversal started at the 1.3400 resistance level. Here, the price started making strong bearish candles, which later punctured the 22-SMA support and the bullish trendline.

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Currently, GBP/USD is bouncing lower after retesting the 1.3002 level. The price has pushed below the SMA, and the RSI is in bearish territory. In the coming week, bears will target the 1.2701 support level. Moreover, the bearish bias will remain if the price stays below the SMA and the RSI below 50.

https://www.forexcrunch.com/blog/2024/11/03/gbp-usd-weekly-forecast-boe-and-us-election-uncertainty/