GBPUSD Technical Analysis – Back in rangebound mode

<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.</li><li>The latest <a href="https://www.forexlive.com/news/us-november-pce-core-inflation-32-vs-33-expected-20231222/">US PCE</a> missed expectations across the board with
the Core 6-month annualised rate falling below the Fed’s target at 1.9%. </li><li>The <a href="https://www.forexlive.com/news/us-november-non-farm-payrolls-216k-vs-170k-expected-20240105/">NFP report</a> beat
expectations although there was more weakness under the hood. </li><li>The latest <a href="https://www.forexlive.com/news/us-december-ism-manufacturing-pmi-474-vs-471-expected-20240103/">ISM Manufacturing PMI</a> beat expectations, while the <a href="https://www.forexlive.com/news/us-december-ism-services-506-vs-526-expected-20240105/">ISM Services PMI</a> missed by a big margin. </li><li>The hawkish Fed members have been leaning
on a more neutral side lately.</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 state 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> 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 is
consolidating around the highs as the market expects both the central banks to
start cutting rates soon. We can see that the latest leg higher <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverged</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a>, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the target for a pullback should be around the 1.25
handle. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the pair recently
bounced around the 1.26 handle following the weak US data. Overall, there’s not
much to do here as we don’t have clear levels where to lean on. In fact, the
buyers would be better off to wait for a pullback into the 1.25 handle where
they will have a stronger risk to reward setup. </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 main swing levels marked on the
chart. The sellers should pile in at every break lower with the 1.25 handle as
the ultimate target. The buyers, on the other hand, are likely to use these
swing levels to try to position for a rally into new highs. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is a bit bare on the data front with the main
releases scheduled for the final part of the week. In fact, on Thursday we get
the US CPI report and the US Jobless Claims figures, while on Friday we
conclude the week with the UK GDP and the US PPI data. </p>

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