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  • GBP/USD remains under pressure around 1.3650 as Greenback surges.
  • The market may remain rangebound ahead of BoE and Fed this week.
  • Eased UK-France tension may help the pound a little.
  • Market sentiment is still risk-off amid global economic concerns and Covid.

The outlook for GBP/USD is bearish as the price has been lingering below the 1.3700 area, and stronger Greenback retains the pressure.

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The GBP/USD pair continues to hover around 1.3650, down 0.09% on the day ahead of London’s opening on Tuesday. In the meantime, the cable pair is exhibiting a three-day downward trend as the market prepares for the Federal Reserve System (FRS) and Bank of England (BOE) decisions to be announced on Wednesday and Thursday, respectively.

The recent good news about Brexit is helping to tune in to the bears on GBP / USD as market worries about the Fed and the Bank of England support the US dollar.

A pause by France in imposing sanctions against the UK for fishing is among them. The Independent reports that the French government has ended previous punitive measures against British vessels after the Jersey government issued nearly fifty additional fishing licenses to French boats. Reuters reported that the UK authorities had sent initial signals to France that negotiations would be accelerated.

By Wednesday, France is expected to respond to its latest proposals. It is worth noting that David Frost, the British Brexit leader, will travel to Paris on Thursday for talks. Beyond fishing disputes, other challenges, such as the Northern Ireland Protocol (NI), could undermine optimism about Brexit.

The CME BOEWatch tool predicts a 100% chance of rate hikes for November and December. Inflation in the UK is about 5.0%, which is double the Bank of England’s target. However, the recent increase in the number of Covid infections in the UK, recently reported to 40,077 from 38,009 the day before, casts doubt on the likely move of the “old lady.”

Along with a frightening market sentiment ahead of a significant Bank of England decision on Thursday, the mixed US PMI and China’s recent call for local governments to stockpile food for the winter also weigh on market sentiment and support the dollar.

The GBP/USD currency pair is likely to remain bearish as the dollar continues to benefit from gloomy stock futures and risk aversion ahead of major central bank events. Talk of US incentives and headlines about Brexit can still amuse pair traders.

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GBP/USD technical outlook: Bears dominating under 1.3700

GBP/USD 4-hour chart outlook

The GBP/USD outlook is consolidating the losses below key moving averages on the 4-hour chart. The average daily range is 37% so far, which indicates decent volatility in the market. The congestion of 20, 50, and 200 SMAs at the 1.3710 area keeps the bearish pressure intact. However, the pair may find some respite amid technical profit-taking around the 1.3650 area and test 1.3700. On the downside, 1.3600 is the key support ahead of 1.3570.

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