• GBP/USD starts November on the right footing amid USD weakness, risk flows.
• Fed and BOE are set to hike policy rates by 75 bps each this week.
• Cable is likely to extend range play between 100 and 50DMAs.

GBP/USD is consolidating the rebound above 1.1500 so far this Tuesday, kicking off November on the right footing. Investors brace for the critical Fed and BOE rate hike decisions, with both the central banks set to announce 75 bps rate increases later this week.

Ahead of the central banks’ bonanza, investors are breathing a sigh of relief, thanks to the FX market repositioning and the rally in Chinese stocks. The risk-on market environment is boding well for the higher-yielding pound sterling at the expense of the safe-haven US dollar.

Attention turns towards the US ISM Manufacturing PMI release, although not much reaction is expected on the data release unless the figure disappoints expectations by a wide margin. Meanwhile, the UK S&P Global Final Manufacturing PMI improved to 46.2 in October vs. 45.8 expected and the first reading of 45.8.

GBP/USD: Daily chart

From a short-term technical perspective, GBP/USD is biding time to yield a sustained break above the mildly bearish 100-Daily Moving Average (DMA) at 1.1723.

The case for an upside break appears compelling, as the 14-day Relative Strength Index (RSI) remains firmer above the midline. The next upswing could materialize on the Fed or BOE policy outcome.

Until then, the pair is likely to maintain its consolidative mode between the 100DMA barrier on the upside while the descending 50DMA at 1.1369 will continue guarding the downside.

In case, the tide turns against bulls, then a breach of the 50DMA support will expose the bullish 21DMA cap at 1.1316.

Meanwhile, acceptance above the 100DMA will kickstart a fresh uptrend towards the 1.1800 round level.  

GBP/USD: Additional technical levels