Photo by Colin Watts on Unsplash 
 

GBP/USD accelerated into a fifth straight winning session on Wednesday, gaining another 0.55% on the day and pushing through the 1.3200 handle. Price action is now set to challenge key long-term moving averages, and the ball will remain in Cable bulls’ court through the back half of the trading week.

US markets are set to go functionally dark for the remainder of the week with American market participants taking Thursday and Friday off for Thanksgiving holiday celebrations. Things remain relatively quiet on the UK side of the market on the economic data docket; however, government budget tensions remain elevated as the British parliament grapples with finding ways to fund its operations without barreling into an out-of-control deficit.

According to the CME’s FedWatch Tool, rate traders see over 80% odds of a third straight quarter-point rate trim from the Federal Open Market Committee (FOMC) on December 10. Several key FOMC voting members pivoted into a surprisingly dovish stance over the past week, and the Fed’s overall tone on potential interest rate cuts has shifted dramatically from the overly cautious stance from the last rate meeting.

GBP/USD price forecast
 

In the daily chart, GBP/USD trades in the 1.3250 region. The 200-day Exponential Moving Average (EMA) trends lower at 1.3265, capping the upside and preserving a mild bearish bias. Price holds beneath this gauge, suggesting rallies remain vulnerable. The slow Stochastic oscillator (14,5,5) has climbed to 71.9, signaling overbought momentum after an upswing.

Momentum shows upside fatigue as the Stochastic oscillator sits near extreme territory, which could precede a pause or shallow pullback. A daily close above the 200-day EMA would turn bias higher and allow an extension, while rejection below the average would maintain a sideways-to-soft tone. A bearish rollover in the Stochastic would reinforce downside risk, whereas a sustained hold above 70 would keep the near-term push intact.

GBP/USD daily chart
 

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