• GBPUSD prints mild gains in a struggle to extend the recent upside near one-week high.
• Chatters surrounding US elections updates, China’s covid woes probe buyers.
• UK PM Sunak’s likely plan to raise top tax rate, recession fears also challenge upside moves.
• US/UK political updates, China’s coronavirus news may entertain traders ahead of Thursday’s US CPI, Friday’s UK Q3 GDP.

GBPUSD seesaws around the mid-1.1500s during the four-day uptrend as bulls and bears jostle amid early Wednesday. While the Cable pair’s previous gains could be linked to the broad US dollar weakness, the recent anxiety in the market appeared to have probed the bulls of late.

Among the key catalysts that challenged the previous risk-on mood are the updates from the US mid-term elections. On the same line are speculations surrounding the UK’s fresh fiscal plan, up for publishing in the next week, as well as China’s covid woes.

Reuters quotes The Telegraph as it said, “British Prime Minister Rishi Sunak is considering expanding the top rate of income tax next week after the Treasury warned that more money was needed to protect pensions and benefits.” The news also mentioned that raising the 45% top rate, or lowering the 150,000 pounds($173,160.00) annual income threshold at which it kicks in are options now being discussed, the newspaper reported, adding the Treasury is looking at increasing the National Insurance rate paid by employers by 1.25 percentage points. While such an action is an open challenge to the Tory manifesto, the UK’s economic conditions are dire and hence taking such steps may not hurt the GBPUSD in total, despite challenging the Cable bulls of late.

It should be noted that Bank of England (BoE) Chief Economist Huw Pill cited recession fears during a panel discussion at the UBS European Conference titled "Global monetary policy challenges," in London. The policymaker also added, “BoE will do what is needed to get inflation back to 2% on a sustainable basis,”

Elsewhere, China reports the highest levels of new COVID cases in six months, with the latest addition of 8,335 for November 08, while marking a fresh virus-led lockdown in Guangzhou’s second district.

Furthermore, the latest polls cited by Reuters suggest that Republicans are favored to win control of the House of Representatives and possibly the Senate, which in turn raises concerns over increasing the US debt ceiling next year. The Republicans are also likely to temper potential Democratic spending and regulations.

Against this backdrop, S&P 500 Futures struggle to track Wall Street’s gains while the US 10-year Treasury yields probe bears after snapping a four-day downtrend the previous day.

Looking forward, risk catalysts are more important for clear directions ahead of Thursday’s key US Consumer Price Index (CPI) for October and the British Gross Domestic Product (GDP) for the third quarter (Q3), up for publishing on Friday.

Technical analysis

GBPUSD takes a U-turn from a downward-sloping resistance line from early September, around 1.1600 by the press time. However, the bullish MACD signals and steady RSI (14) join the pair’s successful trading above the 50-DMA, around 1.1330 at the latest, to keep the buyers hopeful.