GBP/USD heldnear flat on Friday after U.S. PCE and ECI data, with traders wary of adding to longs ahead of Fed and BoE rate announcements Nov.
2 and 3, though expectations of 75bp hikes from both will leave the market focused on policymaker comments for hints at future policy shifts that could drive cable.
The pound's resurgence on newfound UK political stability, elevated BoE rate expectations to counteract rising UK inflation and talk of a potential Fed shift to a lower rate trajectory has run into headwinds above 1.16 as traders prepare for the upcoming meetings.
Though the BoE's terminal rate outlook is well below the highs seen after former PM Liz Truss' mini-budget tanked GBP/USD to all-time-lows by 1.03, the new government's more fiscal approach is likely to keep the pound on its current path higher as shorts unwind.
Technically, a close above 1.1497, the 50% Fib of 1.2667-1.0327, and the falling daily cloud give bulls momentum for further gains above Thursday's 1.1645 high, with likely targets 1.1738 the Sept. 13 high and the Aug. 26 high of 1.19 in focus.
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