GBPUSD Technical Analysis – Approaching a key resistance

<p>USD</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-interest-rate-decision-no-change-20231101/">left interest rates unchanged</a> as
expected with basically no change to the statement.</li><li><a href="https://www.forexlive.com/centralbank/powell-opening-statement-the-committee-is-proceeding-carefully-20231101/">Fed Chair Powell</a> stressed
once again that they are proceeding carefully as the full effects of policy
tightening have yet to be felt.</li><li>The recent <a href="https://www.forexlive.com/news/us-october-core-cpi-40-yy-versus-41-yy-expected-20231114/">US CPI</a> missed
expectations across the board bringing the expectations for rate cuts
forward. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> is
starting to show weakness as <a href="https://www.forexlive.com/news/us-initial-jobless-claims-231k-vs-220k-estimate-20231116/">Continuing Claims</a> are now
rising at a fast pace and the recent <a href="https://www.forexlive.com/news/us-october-non-farm-payrolls-150k-vs-180k-expected-20231103/">NFP</a> report
missed across the board.</li><li>The <a href="https://www.forexlive.com/news/us-october-consumer-confidence-1026-vs-1000-expected-20231031/">US Consumer
Confidence</a> and <a href="https://www.forexlive.com/news/us-november-prelim-umich-consumer-sentiment-604-vs-637-expected-20231110/">University of
Michigan Consumer Sentiment</a> continue to fall.</li><li>The latest <a href="https://www.forexlive.com/news/us-september-ism-manufacturing-pmi-467-vs-490-expected-20231101/">US ISM
Manufacturing PMI</a> missed expectations by a big margin,
followed by a disappointing <a href="https://www.forexlive.com/news/us-october-ism-services-518-vs-530-expected-20231103/">ISM Services PMI</a>,
although the latter remained in expansion.</li><li>The recent <a href="https://www.forexlive.com/news/us-october-retail-sales-01-vs-03-expected-20231115/">US Retail Sales</a> beat
expectations, while the <a href="https://www.forexlive.com/news/us-october-ppi-13-versus-19-expected-20231115/">US PPI</a> missed
forecasts by a big margin. </li><li>The recent Fedspeak has been leaning on
the hawkish side, but last week’s inflation report pretty much confirmed that
the Fed might be done for the cycle. </li><li>The <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">market</a> doesn’t
expect the Fed to hike anymore.</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-20231102/">kept interest rates unchanged</a> as expected at the last meeting.</li><li>The central bank is leaning towards
keeping interest rates “higher for longer”, although it keeps a door open for
further tightening if inflationary pressures were to be more persistent. </li><li>BoE <a href="https://www.forexlive.com/centralbank/boes-bailey-inflation-is-still-too-high-20231102/">Governor Bailey</a> repeated that they will keep rates
high for long enough to get inflation back to target. </li><li>The latest <a href="https://www.forexlive.com/news/uk-october-payrolls-change-33k-vs-11k-prior-20231114/">employment report</a> beat expectations with wage growth
remaining at elevated levels. </li><li>The <a href="https://www.forexlive.com/news/uk-october-cpi-46-vs-48-yy-expected-20231115/">UK CPI</a> missed expectations across the board, which is
a welcome development for the BoE.</li><li>The <a href="https://www.forexlive.com/news/uk-october-flash-services-pmi-492-vs-493-expected-20231024/">UK PMIs</a> showed further contraction in the services
sector, which accounts for 80% of UK’s economic activity.</li><li>The <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 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 GBPUSD is
getting closer to the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> around
the 1.26 handle where we can also find the 50% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
for <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a>. That’s
where we can expect the sellers to step in with a defined risk above the
resistance to position for a drop into the 1.23 support. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the pair is
starting to <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverge</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> right as
it approaches the key resistance. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. In this case, we might see a
selloff from the resistance into the 1.24 handle where the buyers should step
in with a defined risk below the swing low and target a break above the 1.26
handle. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
bullish trend on this timeframe is intact and we can expect the buyers to lean
on the minor <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> where
they have also the confluence with the 38.2% Fibonacci retracement level and
the red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>. The
sellers, on the other hand, will want to see the price breaking lower to pile
and target the 1.23 support. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Today, we have
the FOMC Meeting Minutes but it's unlikely to be market moving given that it's
three-weeks old data. Tomorrow, we have the US Jobless Claims report which is
probably going to be the most important release of the week. On Thursday, we
have the UK PMIs while on Friday we conclude the week with the latest US PMIs.</p>

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