GBP/USD: Pound Struggles to Break Out of Short-Term Range Trading Near $1.35. What’s Next?

Currency pair is shuffling between $1.3330 and $1.3590, drawing double tops and double bottoms – a dream for every technical bro.

☕ Pound-Dollar Zig-Zagging

• The GBPUSD pair was floating in the mid-range of a short-term consolidation channel early Tuesday as currency traders were parsing the latest news on both sides of the Atlantic.
• The UK pound was changing for $1.3440, meeting both the 50-day and the 100-day moving average. The 200-day line still indicates a highly bullish market with its positioning near $1.3160.
• But if you look at the short-term trend, the exchange rate is virtually moving sideways, zig-zagging between a lower end near $1.3330 and an upper end near $1.3590.

🐾 Double Tops and Bottoms

• Draw the lines there and you see a previous double top with the third leg up breaking out but then diving back in. And on the bullish side of things, the pound bottomed out on September 3 and then repeated the pattern on September 26, working out a double bottom in the process.
• So what’s happening for the pair to be sandwiched between these levels? On the one hand, uncertainty out of the US is keeping a lid on the US dollar’s upside.
• The US government gridlock continues for yet another day and will remain in place until the Senate gets 60 votes to pass the divisive funding bill. The fifth vote showed Republican senators needed at least eight votes to advance their proposal.

👀 What to Look for in Days Ahead

• And in the UK, political jitters from France caused UK bonds to slide as the French government was getting into deeper troubles. The French prime minister, Sébastien Lecornu, quit hours after naming his picks for top roles.
• What’s next for the pair? The Federal Reserve will be dropping its minutes from the last meeting three weeks ago. Back then, markets got what they’ve been wanting – a cut to borrowing costs. The summary will help gauge the mood around the Fed halls, especially on more rate cuts.
• If Senators are able to strike a deal, the government will start churning out economic reports again. And that’s vital for investor visibility. If that happens, we’ll get the jobs report with a weeklong delay, on Friday. Analysts expect 52,000 jobs in September, up from 22,000 in August.