GBP/USD snaps five-day losing streak but gains remain tepid

• GBP/USD pumped the brakes on recent losses but remains below the 50-day EMA.
• Latest Fed Meeting Minutes due Wednesday, UK MPC policy hearings on Thursday.
• Investor hopes for an extended acceleration of Fed rate cuts have vanished.

GBP/USD pulled the plug on a five-day losing streak, closing a scant one-sixth of a percent in the green on Tuesday. Despite Cable bidders successfully snapping the near-term losing streak, the pair remains stubbornly on the low side of the 50-day Exponential Moving Average (EMA).

UK data remains thin in the front half of the trading week, leaving GBP traders to twiddle their thumbs until the Bank of England's (BoE) Monetary Policy Report Hearings, slated for Thursday. UK Gross Domestic Product (GDP) figures will follow on Friday.

The Federal Reserve's (Fed) latest Meeting Minutes from the September rate cut meeting will be released on Wednesday, giving Greenback traders plenty to chew on. Markets widely hoped for a follow-up double rate cut in November after the Fed blew the doors open with a jumbo 50 bps rate trim in September. However, core inflation still holding above Fed target levels and US labor figures that wildly outran expectations last week have firmly depressed rate cut hopefuls. 

According to the CME's FedWatch Tool, rate markets see nearly 90% odds that the Fed will follow up September's jumbo 50 bps rate cut with a more modest 25 bps on November 7. Fed officials widely telegraphed that a weakening in the US labor market would be required to push the Federal Reserve into further outsized rate trims.

GBP/USD price forecast

GBP/USD is experiencing a short-term correction after a strong uptrend. The key level to watch is the 50-day EMA, which currently acts as resistance. A break above this level could reignite bullish momentum. However, the bearish signals from the MACD and the price's failure to maintain above the 50-day EMA suggest that traders should remain cautious. If the price dips below the 1.30 support, it could signal a deeper correction toward the 200-day EMA. Conversely, a break above the 50-day EMA would indicate that the bulls are regaining control.

GBP/USD daily chart