GBPUSD clings to mild losses above 1.1300 with eyes on UK budget, US inflation

• GBPUSD consolidates the biggest daily gains in a month.
• UK FinMin Hunt eyes 60 billion British Pound worth tax hike, spending cuts for the much-awaited budget.
• Mixed US data, Fedspeak allowed buyers to sneak in before the covid woes restricted upside momentum.

GBPUSD picks up bids to pare intraday losses around 1.1340 during early Monday morning in Europe. Even so, the Cable pair remains on the dicey floor as it tries to reverse the previous day’s gains, the biggest in a month, amid the risk-averse markets.

China’s rejection to the hopes of dumping zero-covid policy joined an uptick in the virus numbers from the dragon nation to offer a negative start to the week. Even so, hopes of an increase in private investments in the world’s second largest economy joined mixed concerns surrounding the US Federal Reserve’s (Fed) next move to keep the buyers hopeful.

At home, chatters over UK Finance Minister (FinMin) Jeremy Hunt’s preparations for the fiscal budget release, up for publishing on November 17, seems to probe the GBPUSD traders. “Early drafts of the statement to be delivered on Nov. 17 contain plans for up to 35 billion pounds of spending cuts and up to 25 billion pounds of tax rises, likely to include freezing income tax thresholds and targeting dividend tax relief, the Guardian report said,” said Reuters.

It’s worth noting that that the hawkish comments from Bank of England (BoE) Chief Economist Huw Pill, published on Friday, Also favor the GBPUSD bulls. “We still think there is more to do on inflation pressures,” said BOE’s Pill.

It’s worth noting, however, that the anxiety ahead of the US Consumer Price Index (CPI) for October, especially after Friday’s mixed jobs data, challenge the quote’s upside momentum. Also important to watch will be the Preliminary readings of the UK Gross Domestic Product (GDP) for the third quarter (Q3).

Against this backdrop, the S&P 500 Futures retreat to 3,750, fading the previous day’s rebound from the lowest level in two weeks whereas the US Treasury yields remain sluggish around the multi-day highs printed the previous day.

Moving ahead, the UK Q3 GDP and the US CPI for October will be crucial amid the recently hawkish BOESpeak and the talks over the Fed’s pivot. While a likely easing in the British GDP could probe the GBPUSD buyers, softer US inflation may allow the quote to remain firmer.

Also read: GBPUSD Weekly Forecast: Risks skewed to the downside in US inflation week

Technical analysis

A one-month-old bullish channel, currently between 1.1160 and 1.1710, keeps the GBPUSD buyers hopeful even as MACD teases bears.