GBP/USD – Breaks key support amid strong US economic figures

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<li><strong>Traders pare rate cut expectations after strong US data</strong></li>
<li><strong>UK households remain cautious with spending in December</strong></li>
<li><strong>GBPUSD breaks quadruple top neckline</strong></li>
</ul>
<p>The US economy is going from strength to strength, complicating the Federal Reserve’s intentions to cut interest rates multiple times this year.</p>
<p>The jobs report on Friday was red hot, with the wages component particularly problematic from a central bank perspective as it looks for further evidence that inflation is returning sustainably to target.</p>
<p>The services PMI on Monday further reinforced the image of an economy that’s getting stronger and stronger, not buckling under the pressure of high interest rates.</p>
<p>While the central bank can achieve its inflation target with a strong economy, it will only encourage policymakers to cut rates with extreme caution through fear of overheating the economy and causing another inflation headache.</p>
<p>UK data on the other hand continues to paint the picture of an economy that’s flatlining, albeit with a tight labour market and strong inflationary pressures. The BRC retail sales monitor highlighted the softness of spending during the holiday season, a sign of how careful households are still being with their finances.</p>
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<p><strong>GBPUSD breaks important support</strong></p>
<p>Cable had been consolidating over the last month and a half but the recent US data appears to have brought that to an end.</p>
<p><strong>GBPUSD Daily</strong></p>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D.png" target="_blank" rel="noopener"><img loading="lazy" class="aligncenter wp-image-809724" src="https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D-1024×497.png" alt="" width="620" height="301" srcset="https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D-1024×497.png 1024w, https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D-300×146.png 300w, https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D-768×373.png 768w, https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D-1536×746.png 1536w, https://www.marketpulse.com/wp-content/uploads/2024/02/bVfkh65D.png 1708w" sizes="(max-width: 620px) 100vw, 620px" /></a></p>
<p>Source – OANDA</p>
<p>A move below 1.26 has broken the neckline of a quadruple top and now it’s testing that level from below. A failure to break back above could be viewed as confirmation of the initial breakout, reinforcing the bearish move.</p>
<p><strong>GBPUSD 4-Hour</strong></p>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU.png" target="_blank" rel="noopener"><img loading="lazy" class="aligncenter wp-image-809725" src="https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU-1024×498.png" alt="" width="619" height="301" srcset="https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU-1024×498.png 1024w, https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU-300×146.png 300w, https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU-768×373.png 768w, https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU-1536×746.png 1536w, https://www.marketpulse.com/wp-content/uploads/2024/02/ILPVvUQU.png 1708w" sizes="(max-width: 619px) 100vw, 619px" /></a></p>