Sterling Could Face Renewed Selling Pressure After a Rejection at Local Resistance

Summary:

A rejection from the current resistance area could push both components of the MACD into bearish territory, aligning the oscillators with the downside scenario and potentially allowing the downward move to resume.

Sell GBPUSD

EXP

Trading

1.34044

ENTRY

1.32110

TGT

1.34750

1.33860 +0.00095 +0.07%

Point

Flat

1.32110

TGT

CLOSING

1.34044

ENTRY

1.34750

UK Nationwide House Prices remained unchanged in October, according to data released on Friday, outperforming market expectations of a 0.2% contraction and improving from the 0.3% decline recorded in September.

Investors have now shifted their attention toward the Bank of England, which is scheduled to announce its monetary policy decision next week. Recent macroeconomic data indicate that the UK economy continues to expand, while inflation remains considerably above the central bank's target. This combination has led markets to price in almost entirely a 25-basis-point interest rate increase at next week's meeting.

Thursday's Gross Domestic Product (GDP) report showed that the economy grew at an annualized rate of 3.4% in the third quarter, compared with 2.2% in the previous quarter. However, concerns remain over the potential impact of lower returns on AI investments, as companies could respond by reducing their spending, potentially slowing economic growth.

Meanwhile, the Federal Open Market Committee (FOMC) voted 10-2 on Wednesday to keep interest rates unchanged within the 3.75%–4.00% range. Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack supported a 25-basis-point (bps) rate increase. Fed Chair Kevin Warsh reiterated his commitment to price stability, stating that "although overall financial conditions are more restrictive, I am not willing or able to characterize them as restrictive."

Inflation also remains above the Federal Reserve's 2% target. Data released on Thursday showed that the headline Personal Consumption Expenditures (PCE) Price Index increased by 0.5% month over month and 3.6% year over year in September. Meanwhile, the core measure rose by 0.3% on a monthly basis and 3.1% compared with the same period last year. Sterling Could Face Renewed Selling Pressure After a Rejection at Local Resistance_1

Sterling Could Face Renewed Selling Pressure After a Rejection at Local Resistance_1

Technical Analysis

GBPUSD moved lower after briefly breaking above the descending trendline, which converges with local resistance at 1.34041. This area was also rejected in mid-September, triggering a decline that eventually took the pound toward its local lows. Therefore, if the pair experiences another solid bearish reaction and quickly moves back below the descending trendline, a more extended decline could follow, potentially taking the price toward the local support area at 1.3208. Meanwhile, the 100- and 200-period moving averages are located at 1.3308 and 1.3299, respectively, and could provide dynamic support as the pair moves lower.

Looking at the oscillators, the RSI temporarily climbed to 69.68, approaching overbought territory and suggesting that the current advance could be vulnerable to a pullback. At the same time, the MACD is showing a bullish histogram that is beginning to lose depth, while its signal lines remain slightly above the neutral level. A rejection from the current resistance area could push both components of the MACD into bearish territory, aligning the oscillators with the downside scenario and potentially allowing the downward move to resume.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3400

Target price: 1.3211

Stop loss: 1.3475

Validity: Nov 10, 2026 15:00:00

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