GBPUSD Technical Analysis – Key levels in play

USD

• The Fed left interest rates unchanged as expected with basically no change to the
  statement. The Dot Plot still showed three rate cuts for 2024 and the economic
  projections were upgraded with growth and inflation higher and the unemployment
  rate lower.
• Fed Chair Powell maintained a neutral stance as he said that it was
  premature to react to the recent inflation data given possible bumps on the way
  to their 2% target.
• The US CPI and the US PPI beat expectations for the second
  consecutive month.
• The US Jobless Claims beat expectations last week.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• The US Consumer Confidence missed expectations although the labour
  market details improved.
• The market still expects the first cut in June but
  the probability stands at just 60%.

GBP

• The BoE left interest rates unchanged as expected but with Haskel and
  Mann this time voting for a hold instead of a hike.
• The employment report missed expectations with an uptick
  in the unemployment rate and an easing in wage growth.
• The UK CPI missed expectations across the board but with
  Services inflation remaining sticky, which continues to support the BoE’s
  patient stance.
• The latest UK PMIs showed the Services PMI missing expectations
  slightly and the Manufacturing PMI beating.
• The market expects the first rate
  cut in June.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD yesterday
jumped following the US ISM Services PMI release as the price index dropped to
the lowest level in 4 years quelling some inflation fears caused by the strong
US ISM Manufacturing PMI on Monday. The price is now near the recent swing high
level where we can expect the sellers to step in to position for new lows,
while the buyers will look for a break higher to target the 1.28 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that reacted to the
key resistance zone
around the 1.2670 level where we can find the confluence of the
previous swing high, the 50% Fibonacci retracement level
and the trendline. This is
where we can expect the sellers to step in with a defined risk above the
trendline to position for a drop into new lows. The buyers, on the other hand,
will want to see the price breaking higher to invalidate the bearish setup and
position for a rally into the 1.28 handle.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the strong push higher yesterday following
the ISM Services PMI release and the rejection from the resistance today. If
the price breaks below the most recent higher low at 1.2643, we could see the
sellers increasing the bearish bets. Nonetheless, a lot will depend on the US NFP
tomorrow and the US CPI next Wednesday. Those two data points will likely
decide the direction for the next weeks.

Upcoming Events

Today we get the latest US Jobless Claims figures
while tomorrow we conclude the week with the US NFP report.

This article was written by FL Contributors at www.forexlive.com.