GBPUSD Technical Analysis – We are at a key support

<p>USD</p><ul><li>The Fed <a href="https://www.forexlive.com/news/fomc-decision-no-change-to-rates-2024-median-dot-46-vs-49-expected-20231213/">left interest rates unchanged</a> as expected at the last meeting with a shift in
the statement that indicated the end of the tightening cycle. </li><li>The Summary of Economic Projections showed a
downward revision to Growth and Core PCE in 2024 while the Unemployment Rate
was left unchanged. Moreover, the Dot Plot was revised to show three rate cuts
in 2024 compared to just two in the last projection. </li><li><a href="https://www.forexlive.com/centralbank/powell-qa-noted-that-officials-talked-about-path-for-cuts-today-20231213/">Fed Chair Powell</a> didn't push back against the strong dovish pricing
and even said that they are focused on not making the mistake of holding rates
high for too long, which implies a rate cut coming soon.</li><li>The <a href="https://www.forexlive.com/news/us-november-core-cpi-40-yy-versus-40-yy-expected-20231212/">US CPI</a> last week came in line with expectations
with the disinflationary progress continuing steady. This was also confirmed by
the <a href="https://www.forexlive.com/news/us-november-ppi-09-yy-vs-10-expected-20231213/">US PPI</a> the day after where the data missed
estimates. </li><li>The labour market has been showing signs of
weakening lately but we got some strong releases recently with the <a href="https://www.forexlive.com/news/us-initial-jobless-claims-202k-vs-220k-estimate-20231214/">US Jobless Claims</a> and the <a href="https://www.forexlive.com/news/us-november-non-farm-payrolls-199k-vs-180k-expected-20231208/">NFP</a> coming
in strongly. </li><li>The <a href="https://www.forexlive.com/news/us-november-retail-sales-03-vs-01-expected-20231214/">US Retail Sales</a> last week beat expectations across the board as
consumer spending continues to hold. </li><li>The <a href="https://www.forexlive.com/news/us-december-consumer-confidence-1107-vs-10400-expected-20231220/">US Consumer Confidence</a> report yesterday beat expectations across the
board.</li><li>The latest <a href="https://www.forexlive.com/news/us-november-ism-manufacturing-pmi-467-vs-476-expected-20231201/">ISM Manufacturing PMI</a> missed expectations falling further into
contraction, while the <a href="https://www.forexlive.com/news/us-november-ism-services-527-vs-520-expected-20231205/">ISM Services PMI</a> beat forecasts holding on in expansion. </li><li>The market expects the Fed to start cutting rates
in Q1 2024.</li></ul><p>GBP</p><ul><li>The BoE <a href="https://www.forexlive.com/centralbank/boe-leaves-bank-rate-unchanged-at-525-as-expected-20231214/">left interest rates unchanged</a> as expected at the last meeting
with no dovish language as they reaffirmed that they will keep rates high for
sufficiently long to return to the 2% target.</li><li><a href="https://www.forexlive.com/centralbank/boes-bailey-we-cannot-say-that-interest-rates-have-peaked-20231214/">Governor Bailey</a> pushed back against rate cuts
expectations as he said that they cannot say if interest rates have
peaked. </li><li>The latest <a href="https://www.forexlive.com/news/uk-november-payrolls-change-12k-vs-33k-prior-20231212/">employment report</a> missed forecasts with wage growth
coming in much lower than expected and job losses in November.</li><li>The <a href="https://www.forexlive.com/news/uk-november-cpi-39-vs-44-yy-expected-20231220/">UK CPI</a> today missed expectations across the board,
which is another welcome development for the BoE.</li><li>The <a href="https://www.forexlive.com/news/uk-december-flash-services-pmi-527-vs-510-expected-20231215/">UK PMIs</a> showed the Manufacturing sector falling
further into contraction while the Services sector continues to expand. </li><li>The latest <a href="https://www.forexlive.com/news/uk-october-retail-sales-03-vs-03-mm-expected-20231117/">UK Retail Sales</a> missed expectations across the
board by a big margin as consumer spending remains weak.</li><li>The market expects the BoE to start
cutting rates in Q2 2024</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD recently
probed above the 1.2743 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> but got
smacked back down soon after. The <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">divergence</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> was also
a warning sign of a possible pullback as it often signals pullbacks or
reversals. In this case, the price is pulling back to the key <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> where we
can find the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
1.2593 support and the 50% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level of
the entire fall since July. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see more closely the
bullish setup around the support zone. This is where the buyers are likely to
step in with a defined risk below the trendline to position for a rally into
new highs. The sellers, on the other hand, will want to see the price breaking
below the trendline to invalidate the bullish setup and position for a drop
into the 1.2374 level. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see more
closely the current price action with the pair trading into the support zone.
If the price breaks above the minor downward trendline, the buyers should
increase their bullish bets into new highs. The sellers, on the other hand,
might want to lean on the minor trendline to position for a downside breakout
with a better risk to reward setup. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> we get the latest US Jobless Claims figures,
while tomorrow we conclude the week with the UK Retail Sales and the US PCE data.
</p>

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