Why is British Pound rising above 1.3400 as Oil sell-off overshadows strong US PMI?

A softer Dollar lifts Sterling, with GBP/USD climbing 0.26% to 1.3423.
WTI slumps more than 5.60% even as US manufacturing strengthens.
With NFP in focus, traders expect the BoE to lift rates to 4%.

Sterling starts the eleventh month of the year on a positive footing, advancing around 0.26% against the US Dollar on Monday. GBP/USD stands at 1.3423 at the time of writing, while October’s ISM Manufacturing PMI release points to continued strength in the US economy.

Can GBP/USD extend gains as Oil’s slump weighs on the Dollar ahead of the BoE decision?

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

At 55.5, the Institute for Supply Management (ISM) reading was above both the previous 54.5 and the forecast of 54.6. Employment measures in the report eased by a tenth, while the Prices Paid component slipped to 75.2 from 77.9.

Although the figures favoured the US Dollar, fresh optimism over a diplomatic resolution to the US-Iran conflict drove energy prices lower. West Texas Intermediate (WTI), the US Oil benchmark, dropped more than 5.60% to $96.32. Given the positive correlation between crude and the Greenback, the Oil sell-off weighed on the US currency. The US Dollar Index (DXY), which measures the American currency against six other currencies, edged down 0.27% to 101.68.

According to US Secretary of State Marco Rubio, US President Donald Trump backs a diplomatic resolution. Looking ahead, US mid-term elections would shape price movements before attention shifts to Friday’s Nonfarm Payrolls report.

Having assessed the Autumn Budget, UK traders are now preparing for the Bank of England (BoE) monetary policy announcement.

A 25 basis point increase, taking rates to 4% by year-end, is widely expected from the BoE. According to Prime Terminal, money markets had factored in a total of 33 bps of rate hikes.

How are BoE interest rate probabilities positioned? Source: Prime Terminal

A narrowing interest rate differential between the US and the UK would support the Pound. However, GBP/USD’s rise could be limited if the BoE leaves rates unchanged in December while the Fed delivers the rate increase priced in by market participants.

Which economic releases are next?

With no releases on the UK economic calendar, traders will turn to US Factory Orders and the Job Openings and Labour Turnover Survey (JOLTS).

GBP/USD Price Forecast: Can the technical uptrend continue?

Chart Analysis GBP/USD — Daily price chart for GBP/USD

Holding above the latest composite simple moving average cluster near 1.3376, GBP/USD maintains a bullish near-term outlook at 1.3418 on the daily chart. Former trend-line resistance levels also sit below the pair: the downward resistance originating at 1.3653 has been breached and now offers support around 1.3387, while the earlier resistance line linked to the 1.3869 high supports prices near 1.3244. At close to 59, the Relative Strength Index (14) indicates positive momentum without signalling an overstretched rally. This suggests buyers retain control, although gains remain gradual.

Should GBP/USD retreat, initial support lies around the current price zone of 1.3418, followed by the trend-line floor at 1.3387 and the simple moving average cluster around 1.3376. The previous breakout area near 1.3244 offers a further cushion. A move higher would bring the next significant resistance into view at the breached rising support trend line near 1.3668. Stronger resistance lies at the higher upward trend-line break around 1.3842, where sellers could seek to regain control.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

How Is the Pound Sterling Performing Today?

The British Pound (GBP) recorded its strongest performance against the Japanese Yen today. Its percentage moves against the major currencies listed are presented in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.37%	-0.21%	0.19%	-0.08%	0.19%	0.02%	-0.67%
EUR	0.37%		0.17%	0.55%	0.28%	0.56%	0.39%	-0.27%
GBP	0.21%	-0.17%		0.40%	0.12%	0.39%	0.22%	-0.43%
JPY	-0.19%	-0.55%	-0.40%		-0.26%	-0.00%	-0.17%	-0.86%
CAD	0.08%	-0.28%	-0.12%	0.26%		0.28%	0.09%	-0.56%
AUD	-0.19%	-0.56%	-0.39%	0.00%	-0.28%		-0.16%	-0.83%
NZD	-0.02%	-0.39%	-0.22%	0.17%	-0.09%	0.16%		-0.66%
CHF	0.67%	0.27%	0.43%	0.86%	0.56%	0.83%	0.66%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the British Pound on the left and following its row across to the US Dollar gives the percentage change for GBP (base)/USD (quote) in the corresponding cell.