GBP/USD Weakness Continues Amid Expect. of Faster BoE Rate Cuts

9 oct.

As anticipated in our previous analysis, the British Pound (GBP) remains under pressure, with the GBP/USD pair showing continued signs of weakness. Market sentiment suggests that the Bank of England (BoE) could accelerate its rate-cutting cycle, a view bolstered by recent dovish remarks from BoE Governor Andrew Bailey. Last week, Bailey hinted that the central bank might adopt a more aggressive stance on cutting rates if inflation continues to show favorable trends. This prospect has increased market bets on rate cuts, which is contributing to the downward pressure on the GBP/USD pair.

Market Sentiment: Retailers Hopeful, Smart Money Bearish
From a sentiment perspective, retail traders remain hopeful for a possible bullish reversal in the GBP/USD pair. However, smart money (institutional investors) continues to lean towards a bearish outlook, aligning their positions with the broader market expectation of a weakening Pound in the face of potential rate cuts by the BoE.

Technical Outlook: Identified Demand Area
Technically, we have recognized a potential demand area where the price may find support. However, the downward trend could extend further, particularly after the release of the FOMC Minutes, which may provide more clarity on the direction of US monetary policy. This could continue to push the GBP/USD pair lower.

At this moment, patience is crucial. We are waiting for the price to approach key levels where a potential reversal could occur, but it is essential to wait for confirmation before taking action.

Conclusion
The British Pound remains under pressure as markets increasingly believe that the Bank of England could accelerate its rate-cutting cycle. Governor Bailey's recent comments have fueled this speculation, leading to increased bearish sentiment in the GBP/USD pair. For now, patience remains key as we wait for the price to reach critical demand areas that may offer a chance for a reversal. Until then, traders should remain cautious and avoid premature entries.

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