Fundamental Overview
The USD continues to consolidate around the highs except against the commodity currencies where it’s been having the upper hand. The US inflation data last week was once again a disappointment although the data that feeds into the Core PCE was overall benign as forecasters expect a 0.13% M/M increase.
Nonetheless, the
Treasury yields continue to climb and are now back around the post-US election highs. There’s some understandable uneasiness in the bond market given the hot US data and the Fed continuing to cut into an accelerating economy.
On the GBP side, the
UK employment report today came in better than expected, especially on the wage growth side which strengthened the probabilities for the BoE to remain on hold this week and decreased the chances for three rate cuts in 2025.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD failed to extend the rally after breaking above the downward
trendline and sold off all the way back to the major upward trendline. This is where the buyers are stepping in to position for a rally into new highs, while the sellers will look for a break below the major trendline to target a drop into the 1.23 handle next.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong zone around the 1.2715 level where the price reacted from several times in the past weeks. The sellers will likely lean on it to position for a break below the major trendline, while the buyers will look for a break higher to target new highs.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor upward trendline defining the current bullish momentum on this timeframe. The buyers will likely keep on leaning on it to position for the break above the 1.2715 zone, while the sellers will look for a break lower to increase the bearish bets into the major trendline. The red lines define the
average daily range for today.
Upcoming Catalysts
Today, we get the US Retail Sales data. Tomorrow, we have the UK CPI report and the FOMC Policy Decision. On Thursday, we have the BoE Policy Decision and the US Jobless Claims figures. On Friday, we conclude the week with the UK Retail Sales and the US PCE data.
This article was written by Giuseppe Dellamotta at
www.forexlive.com.
