Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Final UK S&P Global/CIPS Services PMI for October is predicted at 47.5, and the Final UK S&P Global/CIPS Composite PMI is predicted at 47.2. Forex traders can compare this to the UK S&P Global/CIPS Services PMI for September, reported at 50.0, and the UK S&P Global/CIPS Composite PMI at 49.1.
The Bank of England is predicted to hike interest rates by 75 basis points to 3.00%. Forex traders can compare this to the previous Bank of England meeting, where the UK central bank raised interest rates by 50 basis points to 2.25%. It would mark the seventh consecutive interest rate increase, as soaring inflation sparked a troublesome cost-of-living crisis. Traders should monitor the press release following the announcement for clues about potential changes to monetary policy and the inflation outlook. Given the slowdown in the UK economy and warnings by the British central bank of stagflationary conditions ahead, with calls for a prolonged recession starting in the fourth quarter of 2022 and lasting five quarters, the Bank of England faces enormous challenges. The start of quantitative tightening should not surprise market participants.
US Initial Jobless Claims for the week of October 29th are predicted at 220K, and US Continuing Claims for the week of October 22nd are predicted at 1,450K. Forex traders can compare this to US Initial Jobless Claims for the week of October 22nd, reported at 217K, and US Continuing Claims for the week of October 15th, reported at 1,438K.
Preliminary US Non-Farm Productivity for the third quarter is predicted to increase by 0.6% quarterly and Unit Labor Costs by 4.1% quarterly. Forex traders can compare this to US Non-Farm Productivity for the second quarter, which contracted 4.1% quarterly, and to Unit Labor Costs, which surged 10.2% quarterly.
The US Trade Balance for September is predicted at -$72.20B. Forex traders can compare this to the US Trade Balance for October, reported at -$67.40B.
The Final US S&P Global Composite PMI for October is predicted at 47.3, and the Final US S&P Global Services PMI is predicted at 46.6. Forex traders can compare this to the US S&P Global Composite PMI for September, reported at 49.5, and the US S&P Global Services PMI at 49.3.
US Factory Orders for September are predicted to increase by 0.3% monthly. Forex traders can compare this to US Factory Orders for August, which were flat at 0.0% monthly.
The US ISM Non-Manufacturing PMI for October is predicted at 55.5. Forex traders can compare this to the US ISM Non-Manufacturing PMI for September, reported at 56.7.
US Natural Gas Inventories for the week ending October 28th are predicted at 97B cubic feet. Traders can compare this to US Natural Gas Inventories for the week ending October 21st, reported at 52B cubic feet.
The forecast for the GBP/USD remains bullish as price action recovers from a slump that almost took this currency pair to parity. Adding to the positive outlook are the ascending Kijun-sen and Tenkan-sen. The Ichimoku Kinko Hyo Cloud began a drift lower but is likely to stabilize amid growing bullish pressures. Traders should monitor the CCI following its breakdown from extreme overbought territory. The minor dip below zero is likely to precede a new push higher. Can bulls build on their 1,000+ pips rally and take the GBP/USD into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the GBP/USD remain inside the or breakout above the 1.1300 to 1.1435 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.1395
- Take Profit Zone: 1.1900 – 1.2060
- Stop Loss Level: 1.1200
Should price action for the GBP/USD breakdown below 1.1300, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1200
- Take Profit Zone: 1.1000 – 1.1060
- Stop Loss Level: 1.1300
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