GBP/USD skids to a halt with plenty of central bank talk in the barrel

• GBP/USD scratched momentum on Tuesday, holding flat near 1.3000.
• BoE Governor Bailey made his first of four public outings on Tuesday.
• UK and US PMI figures due on Thursday.

GBP/USD held steady on Tuesday, testing the waters near the 1.3000 handle. Intraday price action tested a fresh nine-week low, and topside bidding failed to make a mark above 1.3000, keeping near-term momentum hobbled in a midrange just below the key handle.

Bank of England (BoE) Governor Andrew Bailey made his first of four appearances on the docket this week. BoE’s Bailey mostly stuck to the middle of recent scripts, though the BoE head did note some regret at the BoE’s complacency regarding recent financial stability risks.

With three more BoE Bailey appearances this week, Cable traders will keep track of any repetitious statements on Governor Bailey’s speech cards. BoE head Bailey has an appearance on the cards late Wednesday, then Pounsd traders will be pivoting to UK Purchasing Managers Index (PMI) figures coming up on Thursday.

Median market forecasts are expecting a slight downtick in UK activity numbers, with October’s Services PMI specifically expected to ease to 52.2 from 52.4 the previous month.

GBP/USD price forecast

The GBP/USD pair is facing increased selling pressure as it slips below the key psychological level of 1.3000. The pair is currently trading near 1.2980, hovering just above the 200-day exponential moving average (EMA) at 1.2846, which acts as a critical support zone. The 50-day EMA at 1.3085 is sloping downward, indicating that the near-term trend remains bearish. The downward momentum from the September highs near 1.3650 highlights a weakening of bullish strength, with lower highs and lower lows forming since mid-September, suggesting that bears are currently in control.

The MACD indicator paints a bearish picture as well, with the MACD line well below the signal line and the histogram extending deeper into negative territory. This signals further downside risk for the pair, especially if it breaks below the 200-day EMA. A decisive close below 1.2850 could accelerate the selling pressure, with the next support level emerging around 1.2750. On the flip side, a recovery above the 50-day EMA near 1.3085 would be needed to shift the sentiment back in favor of the bulls, though this appears unlikely in the short term given current technical conditions.

GBP/USD daily chart