6 November 2025,06:04
Daily Market Analysis New
6 November 2025, 06:04
Key Takeaways:
*Sterling steadies ahead of the BoE decision, supported by stronger-than-expected PMI data signaling resilient economic activity.
*Persistent inflation and elevated wage growth reinforce expectations for a prolonged period of restrictive monetary policy.
*Fiscal risks ahead of the Autumn Budget cloud the Pound’s outlook, with fears of tax hikes and stagflation weighing on sentiment.
Market Summary:
The Pound Sterling is poised for elevated volatility in today’s session, with the Bank of England’s (BoE) monetary policy decision serving as the primary market catalyst. Ahead of the announcement, the currency has staged a tentative recovery from its recent bearish trend, finding tentative support in robust economic data.
Yesterday’s PMI releases provided a positive impetus, with the Composite PMI printing at 52.2 and the Services PMI at 52.3, both exceeding market expectations. This data has temporarily alleviated downward pressure on the currency. More significantly, underlying inflation dynamics continue to argue for a restrictive policy stance. With UK inflation holding at 3.8%—well above the central bank’s target—and pay growth remaining elevated at 4.7%, the market is pricing in a high likelihood that the Monetary Policy Committee will maintain rates at their current level for an extended period to curb persistent price pressures. This expectation for sustained higher rates provides a fundamental basis for a near-term technical rebound in Sterling.
However, the currency’s longer-term trajectory is clouded by significant fiscal concerns. Market apprehension is building ahead of the Autumn Budget this month, with investors wary of potential tax hikes that could dampen economic growth. The confluence of stubborn inflation and constrained growth prospects raises the spectre of a “stagflation” scenario, which could ultimately erode confidence in the Pound and exert sustained selling pressure, capping any significant rallies beyond the immediate policy-driven volatility.
Technical Analysis
The GBPUSD pair remains under significant selling pressure, having declined more than 3% from its October peak. The pair has now breached the critical 1.3100 support level, trading at its lowest level since April, a development that confirms a pronounced bearish near-term bias.
While a minor technical rebound is emerging from oversold conditions, any recovery is expected to face formidable resistance near the 1.3135 liquidity zone. This level is likely to cap upward movements, with the path of least resistance favoring a resumption of the prevailing downtrend.
Momentum indicators reinforce the negative outlook. The Relative Strength Index (RSI) continues to hover near oversold territory, reflecting persistent selling pressure, while the Moving Average Convergence Divergence (MACD) extends its decline well below the zero line. This configuration suggests bearish momentum is still accelerating, supporting the view for further potential downside. The breach of the April low opens the technical path for a test of the next significant support level near the 1.3000 psychological handle.
Resistance level: 1.3160, 1.3290
Support level:1.3005, 1.2870
Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.
Sign up for a PU Prime Live Account with our hassle-free process.
Effortlessly fund your account with a wide range of channels and accepted currencies.
Access hundreds of instruments under market-leading trading conditions.
Trading Platforms
Learn
About PU Prime
Corporate
Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.
Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.
By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.
Thank You for Your Acknowledgement!
Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.
Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.
Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.
Thank You for Your Acknowledgement!
