The market broadly anticipates that the Bank of England will implement a rate cut in December, posing challenges for the GBP against other major currencies. On Tuesday, Bank of England policymaker Megan Greene indicated that next year's wage settlement figures exceeded expectations and expressed concerns about persistent inflation in the UK, suggesting that monetary policy may need to be further tightening. Multiple UK news outlets reported on Wednesday that Prime Minister Keir Starmer remains vigilant in the face of potential leadership challenges. While Health Secretary Wesley Streeting denied rumors of a conspiracy to overthrow the Prime Minister, the political turbulence has nonetheless impacted market sentiment. ING's Head of Research, Chris Turner, noted that "the ongoing weakness of the pound is indeed linked to the Starmer rumors. In the context of the upcoming fiscal budget, the pound is required to carry additional risk premiums." Economic indicators remain subdued. Labor market data released on Tuesday showed a slight increase in the UK unemployment rate to 5%, while wage growth, excluding bonuses, slowed to 4.6% over the three months ending in September. These figures reinforce market expectations of a 25 basis point interest rate cut by the Bank of England in December, with current market pricing indicating approximately a 75% probability. As the November 26 budget approaches, market anxiety continues to escalate. Previous plans to cut welfare spending and the UK Office for Budget Responsibility's forecast of declining productivity have worsened the fiscal outlook, leading to expectations of tax hikes to balance public finances. Despite the pound's year-to-date appreciation of 5% against the dollar, recent price action has been notably pressured.

Due to market optimism that the U.S. government shutdown is likely to conclude this week, the U.S. dollar has strengthened, exerting pressure on the GBPUSD currency pair. On Wednesday, the House of Representatives approved a funding bill with a vote of 222 in favor and 209 against, ending the longest government shutdown in U.S. history. The legislation is now set to be signed into law by President Donald Trump. Earlier this week, Trump publicly supported this bipartisan agreement aimed at ending the deadlock. Once enacted, a series of upcoming economic data releases are anticipated, with the exception of October's inflation and employment reports, which White House Press Secretary Karoline Leavitt stated are unlikely to be published this month. The U.S. dollar also received support from hawkish Federal Reserve rhetoric, reducing the likelihood of a December rate cut. The CME FedWatch tool indicates the market prices in nearly a 60% chance of a 25 basis point rate reduction in December, down from 67% the previous day. Atlanta Fed President Raphael Bostic addressed economic prospects on Wednesday at the Atlanta Economic Club, warning that premature monetary policy loosening could fuel inflation, although he also noted that a sharp downturn in the labor market in the near term appears unlikely.

In the 4H timeframe, the GBPUSD is oscillating around the Bollinger Middle Band, with the MACD's MACD line and signal line approaching the zero-axis. If a golden cross occurs again, there is a high probability that the price will ascend towards the key resistance levels at 1.32 to 1.326. The RSI stands at 49, indicating a cautious market sentiment and the potential for a trend reversal. In the 1D timeframe, the price has been trending downward along the EMA12 and the Bollinger Middle Band, suggesting a short-term correction back towards the Bollinger Middle Band, approximately 1.324. Following a golden cross in the MACD, the MACD line and signal line are currently retracing toward the zero-axis, but still have some distance to cover, implying that the rebound is incomplete. The RSI at 39 reflects ongoing bearish sentiment, and overall, the short-term rebound has not yet reached its conclusion. Therefore, it is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 1.315

Target Price: 1.33

Stop Loss: 1.3

Support: 1.3, 1.29, 1.28

Resistance: 1.32, 1.33, 1.36