Sterling is reversing the previous downtrend and returning to the 1.1600 area. Fed rotation rumors keep USD bulls on a leash. GBP/USD is holding firm, likely to retest 1.1760 – UOB. The pound rebounded just above 1.1500 on Friday to regain ground lost in the European and American trading sessions and reach the resistance of 1.1600. On the bigger picture, the pair continues to trade in a range for the second day in a row, securing gains after a two-day rally below 1.1300 earlier this week. EXPECTATIONS FOR WEAKER FED POSITION AS USD ACCELERATES Market expectations that the Federal Reserve may begin to slow the pace of its monetary policy tightening in the coming months are keeping the USD in check. Investors have already priced in December 0.75%, but growing rumors of a possible relaxation of monetary policy tightens in December curbs demand for the dollar. Additionally, the myriad of US macroeconomic data released on Friday did not provide a clear direction for the USD. US personal spending rose more than expected in September (0.6% vs. 0. % consensus), confirming that Americans continued to buy despite rising inflation, keeping the US economy in good shape and paving the way for another aggressive hike by the Federal Reserve. . december On the other hand, wage growth slowed in the third quarter, according to the Labor Department, suggesting that inflation may have peaked or is close to peaking. Additionally, US personal consumption expenditures were unchanged at 6.2 percent in September, while the Fed’s preferred inflation gauge, Core PCE, came in below expectations. GBP / USD MAY HAVE BEEN TESTING 1.1760 CONTINUITY – UOB FX analysts see the pair as stable and likely to test the 1.1760 units over the coming week: our expectations of a „further rally” from GBP have not been met. as it traded between 1.1550 and 1.16 5 (…) „Yesterday (October 27, moment 1.1630) we thought that GBP was still strong and likely to strengthen. We announced that the next level to watch is 1.1760.