- Concern about the Federal Reserve’s future measures weighs on the market mood.
- S&P Global will release final PMI estimates for September on Wednesday.
- The GBP/USD pair finds sellers around 1.2100, as demand for dollars prevails.
GBP/USD fell to a seven-month low of 1.2051 on Tuesday as speculative interest rushed into the safe-haven US dollar. The U.S. currency rebounded amid renewed speculation that the U.S. Federal Reserve (Fed) will maintain its aggressive monetary policy stance as inflation remains “too high,” according to officials, while the labor market keeps tense.
On Tuesday, the Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of August stood at 9.6 million, well above the 8.8 million expected. The news sparked risk aversion, and Wall Street plummeted as government bond yields soared, reflecting investor concern. Additionally, in the US, IBD/TIPP economic optimism was reported to have fallen to 36.6 in October, from 48.2 the previous month.
Market traders will be keeping an eye on the S&P Global Services and Composite PMIs for September, which will be released on Wednesday. The UK services PMI is expected to confirm at 46.8, while the composite index is forecast at 47.2. Across the pond in the United States, ADP will release private sector employment numbers for September, forecast at 1.53K, and the official ISM services PMI, forecast at 53.6 in September.
GBP/USD Technical Outlook
The GBP/USD pair is trading around 1.2080 in mid-American afternoon, encountering sellers around 1.2100. The 1.2000 level is the next potential downside target and constitutes a strong psychological barrier. Significant stop losses should accumulate below the figure, and if triggered, the decline could accelerate towards the 1.1900 figure.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
