GBPUSD Technical Analysis – Strong US data boosts the greenback

Fundamental
Overview

The USD got a boost
yesterday from another set of hot data as the US Job Openings surprised to the upside and the
prices paid index in the ISM Services PMI jumped to the highest level since
2023.

The market’s pricing didn’t
change much but traders no longer fully price in the next rate cut before July.
The US CPI report next week remains a key catalyst that will influence greatly
the market’s pricing.

On the GBP side, the BoE kept the Bank Rate unchanged as expected at
the last policy decision but we got a more dovish than expected vote split as 3
voters wanted a rate cut compared to just 1 expected.

The market is pricing a 65%
chance of a rate cut at the upcoming meeting in February and a total of 53 bps
of easing by the end of the year.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD erased the entire Christmas period drop but started its move
lower again yesterday as the US data surprised to the upside. The sellers piled
in with more conviction on the break below the 1.2485 support and will likely target the 1.23 handle. The
buyers, on the other hand, will likely step in around the 1.23 handle to position for new highs with a better risk to reward setup.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, there’s
not much else we can add here as the sellers will keep on pushing towards the 1.23 handle, while the buyers will look for a bounce there for a move back into the highs.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor downward trendline defining the current bearish
momentum on this timeframe. The sellers will likely keep on leaning on it to
position for further downside, while the buyers will look for a break higher to increase the bullish bets into new highs. The red lines define the average daily range for today.

Upcoming
Catalysts

Today, we have Fed’s Waller speaking, the US ADP and the FOMC Minutes.
Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude
the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.