Important events today:

05.11 12:15 UTC: USD – ADP Non-Farm Employment Change

05.11 14:00 UTC: USD – ISM Services PMI

The pound remains under pressure after hitting multi-month lows: the market is pricing in a more dovish trajectory for the Bank of England’s monetary policy, while the dollar receives support from resilient U.S. data. Additional negative pressure for the pound comes from fiscal issues: discussions over tax measures and the need to close the budget gap are heightening concerns about the prospects for the UK economy. These factors shift rate expectations towards earlier easing, reducing the attractiveness of British assets.

On the dollar’s side, stable U.S. services sector activity and continued demand for safe-haven instruments amidst stock market volatility provide support. Treasury yields remain relatively high, supporting dollar inflows and limiting downward corrections in the U.S. Dollar Index. As a result, the growth and rate differential works against GBPUSD.

The coming 24 hours will be crucial for signals from the U.S. regarding employment and services, as well as comments from UK officials regarding the budget and inflation outlook. For now, the fundamental backdrop remains unfavorable for the pound: high budget uncertainty, weak activity dynamics, and the Bank of England’s caution form a predominantly bearish scenario for the pair.

Recommendation: SELL 1.3025, SL 1.3075, TP 1.2950