GBPUSD Technical Analysis – Watch these levels for the next direction

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/the-fomc-keeps-the-target-fed-funds-range-at-525-to-550-20230920/">left interest rates unchanged</a> as expected at the last meeting.</li><li>The macroeconomic projections were revised higher,
and the Dot Plot showed that the FOMC still expects another rate hike by the
end of the year with less rate cuts projected in 2024.</li><li><a href="https://www.forexlive.com/centralbank/highlights-from-the-fed-chair-powells-press-conference-after-september-rate-decision-20230920/">Fed Chair Powell</a> reaffirmed their data dependency but added that
they will proceed carefully. </li><li>The <a href="https://www.forexlive.com/news/us-september-cpi-37-yy-versus-36-yy-expected-20231012/">US CPI</a> last week beat expectations on the
headline figures, but the core measures came in line with forecasts and the
market’s pricing barely changed. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> remains fairly solid as seen once again last week
with the beat in <a href="https://www.forexlive.com/news/us-initial-jobs-claims-209k-versus-210k-estimate-20231012/">Jobless Claims</a>, although continuing claims surprisingly missed. </li><li>The US PMIs
recently showed that the US economy remains pretty resilient. </li><li>The <a href="https://www.forexlive.com/news/us-october-prelim-umich-consumer-sentiment-630-vs-672-expected-20231013/">University of Michigan Consumer Sentiment</a> report last Friday missed across the
board with the inflation expectations figures spiking back up.</li><li>The Fed members continue to cite elevated long-term
yields as a reason to proceed carefully and will likely pause in November as
well.</li><li>The market doesn’t expect the Fed to hike anymore.</li></ul><p>UK:</p><ul><li>The BoE <a href="https://www.forexlive.com/centralbank/boe-leaves-bank-rate-unchanged-at-525-vs-550-expected-20230921/">kept interest rates unchanged</a> at the last meeting. </li><li>The central bank is leaning more
towards keeping interest rates “higher for longer”, although it kept a door
open for further tightening if inflationary pressures were to be more
persistent. </li><li>Key economic data like the latest <a href="https://www.forexlive.com/news/uk-august-payrolls-change-0k-vs-97k-prior-20230912/">employment report</a> showed a very high wage growth
despite the rising unemployment rate, but the latest <a href="https://www.forexlive.com/news/uk-august-cpi-67-vs-70-yy-expected-20230920/">UK CPI</a> missed expectations across the board giving
the BoE a bit of relief.</li><li>The latest <a href="https://www.forexlive.com/news/uk-september-final-services-pmi-493-vs-472-prelim-20231004/">UK PMIs</a> showed further contraction, especially in the
Services sector.</li><li>The market doesn’t expect the BoE to
hike anymore.</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the GBPUSD pair
got rejected almost perfectly from the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> around
the 1.2310 level where we had the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
and the <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>. This is
where the sellers stepped in with a defined risk above the trendline to
position for a drop into the 1.1840 level. The buyers will need the price to
break above the trendline to switch the bias from bearish to bullish and start
targeting new higher highs. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the break
below the counter-trendline saw even more sellers piling in and extending the
selloff into the 1.21 handle. Yesterday, we got a nice pullback into the red 21
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> where we
got a rejection as the sellers leant on the moving average and the previous
swing high level. We can expect the bearish momentum increasing if the UK data
today and tomorrow misses expectations. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
last leg lower <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, we got the pullback into the last swing high where the
sellers stepped in to position for another drop into the lows. The buyers, on
the other hand, are likely to pile in around the support at 1.2175 or on a
break above the swing high at 1.2220. If the price breaks below the 1.2175
support, the sellers should gain full control and we will likely see new lows. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> we will get the UK labour market report at the
top of the hour and the US Retail Sales data later in the day. Tomorrow, we
will see the latest UK inflation figures which could be important for the BoE,
especially if the data surprises notably to the upside. On Thursday, we will
get the US Jobless Claims report and we will also hear from Fed Chair Powell.
Finally, on Friday, we conclude the week with the UK Retail Sales data. </p>

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