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GBP/USD bears lose momentum as rate hike expectations support the market ahead of key data
GBP/USD remains range-bound ahead of the release of crucial economic data, with short-term technicals showing a defensive stance. The currency pair is currently testing around 1.3150, with both buyers and sellers cautious, awaiting multiple major economic reports this week to set the market tone.
**UK Inflation Data and Rate Hike Outlook in Focus**
UK Consumer Price Index (CPI) will be released on Wednesday at the London open (GMT 07:00). The market expects core CPI to ease slightly from 3.5% to 3.4%, while overall CPI may fall from 3.8% to 3.6%. The previous month’s CPI monthly rate is expected to rise from 0.0% to 0.4%. These figures are crucial for the future direction of UK rate hike policies. If inflation data exceeds expectations, it will boost the GBP’s rate hike pricing.
**US Non-Farm Payrolls Data Coming Soon**
Due to the US government shutdown causing delays, the September Non-Farm Payrolls (NFP) report is scheduled for release on Thursday. Although the data is somewhat delayed, investors are eager, as this will be one of the most important economic indicators ahead of the Federal Reserve’s rate decision on December 10.
**Technical Outlook: Breakthrough at 1.3200 is Key**
From a technical perspective, GBP/USD is still struggling below the 50-day and 200-day exponential moving averages (EMA), maintaining a bearish bias. The currency pair has been consolidating since November and is currently near a low around 1.3010. The Relative Strength Index (RSI) has rebounded from oversold levels but has not yet reached the midline, indicating only a mild rebound rather than a clear directional shift. The stochastic oscillator has also crossed upward but remains in the mid-range, consistent with sideways trading.
In summary, GBP/USD is gradually stabilizing after a decline but has yet to establish strong support. The key focus moving forward is whether it can break above the recent high near 1.3200 or fall back to support at 1.3010. Multiple data releases this week are expected to break the current stalemate, with the latest developments in rate hike expectations serving as the main driver of the trend.