GBPUSD Technical Analysis – The sellers are in control

<p>Last
week, the <a href="https://www.forexlive.com/news/us-july-non-farm-payrolls-187k-vs-200k-expected-20230804/">NFP missed</a>
expectations for a second time in a row and the previous numbers were all
revised lower. This was seen as a disappointment as the labour market seems to
be a touch weaker than previously expected. Nevertheless, the unemployment rate
fell once again and lessened the disappointment from the miss in the payrolls
number. The worse part for the Fed is that the average hourly earnings beat
expectations, and such high wage growth is not consistent with a sustainable
return to the 2% target. It’s worth reminding though, that the Fed will see
another NFP report before the September meeting, so this NFP doesn’t change
much, but the data leading into the meeting can still weigh on sentiment. </p><p>On the other hand, the BoE
hiked by 25 bps as expected as the <a href="https://www.forexlive.com/news/uk-june-cpi-79-vs-82-yy-expected-20230719/">UK CPI</a> missed expectations across the board and UK <a href="https://www.forexlive.com/news/uk-june-payrolls-change-9k-vs-23k-prior-20230711/">employment report</a> showed a mixed picture with both
the unemployment rate and wage growth higher. The central bank seemed to be
leaning more on the less hawkish side as a key line in the statement was
tweaked to indicate the propensity for a “higher for longer” stance rather than
a “higher-er for longer” one. </p><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD fell all
the way down to the previous swing low level around the 1.26 handle before
seeing a bounce. The bias is now bearish as the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> have
crossed to the downside and the price has been printing lower lows and lower
highs. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that from a risk
management perspective, the sellers will have a nice spot where to short from
around the 1.2847 level where we can find the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
61.8% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
and the daily 21 moving average. The buyers, on the other hand, will need to
break above that <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> to
invalidate the bearish setup and start targeting the highs. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that at
the moment the price action is forming an <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">ascending triangle</a>. The
price can break on either side of the pattern but what follows is generally an
increase in momentum in the direction of the breakout. Therefore, if the price
breaks below the bottom <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>, we
can expect the sellers to pile in and target the 1.26 handle again. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> the
main event will be the US CPI report on Thursday. The market is likely to focus
more on the Core readings as this is what the Fed is more interested in. Higher
than expected data should give the US Dollar a boost as the market’s
expectations will be skewed more on the hawkish side. On the other hand, lower
than expected readings should weigh on the USD as it would support the
soft-landing narrative in the short-term. At the same time of the US CPI data,
we will also see the latest US Jobless Claims report, which is less likely to
move the market since it’s released at the same time of the CPI, but big
surprises should have an effect, nonetheless. Finally, we conclude the week
with the University of Michigan Consumer Sentiment report on Friday where the
market is likely to focus more on the inflation expectations figures. </p>

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