The Pound Sterling (GBP) has strengthened against the US Dollar (USD) on Monday, driven by a decline in the US Dollar Index (DXY). The DXY has weakened as investors assess the potential outcomes of the upcoming US presidential election. A potential victory for Kamala Harris could lead to a weaker US Dollar, as it is perceived as less supportive of the currency compared to a Donald Trump victory.

Additionally, the Bank of England’s (BoE) upcoming monetary policy decision on Thursday will also influence the Pound Sterling. The BoE is expected to cut interest rates by 25 basis points, but investors will be closely watching for clues about future policy direction.

Key Factors Influencing the Pound Sterling:

• US Presidential Election: A potential Harris victory could weaken the US Dollar, benefiting the Pound.
• Bank of England Monetary Policy Decision: The BoE is expected to cut rates, but investors will be watching for future policy guidance.
• UK Economic Outlook: The UK government’s recent fiscal plans and the OBR’s updated inflation forecast will also impact the Pound.

Technical Analysis:

The Pound Sterling has found support near the 200-day EMA, but the near-term trend remains uncertain. Key levels to watch include:

• Support: 1.2800, 1.2850
• Resistance: 1.3000, 1.3060

Given the current market conditions, traders are advised to monitor the US election results, the BoE’s rate decision, and technical indicators to make informed trading decisions.