GBPUSD Technical Analysis – Bullish signs are emerging

<p>US:</p><ul><li>The Fed hiked by 25 bps as expected and kept
everything unchanged.</li><li>Fed Chair Powell reaffirmed their data dependency
and kept all the options on the table.</li><li>The US economic data keeps on surprising to the
upside, but inflation expectations and CPI readings continue to show
disinflation with the last two Core CPI M/M figures coming in at 0.16%. </li><li>At the moment, the market doesn’t expect another
hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
change this view. </li></ul><p>UK:</p><ul><li>The BoE hiked by 25 bps as expected.
</li><li>The central bank seems 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 keeping
with additional rate hikes. </li><li>Recent economic data is not
supporting the BoE stance as the latest <a href="https://www.forexlive.com/news/uk-july-payrolls-change-97k-vs-9k-prior-20230815/">employment report</a> showed even more wage growth
despite the unemployment rate ticking higher again, and the <a href="https://www.forexlive.com/news/uk-july-cpi-68-vs-68-yy-expected-20230816/">UK CPI</a> beat expectations pointing to stagflation. </li><li>The BoE is expected to hike by
another 25 bps in September.</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD has
bounced on the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> zone
around the 1.2593 level where we had also the 38.2% <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>. This
now looks like a <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">double bottom</a> and the
price will need to break above the neckline around the 1.28 handle to confirm
the pattern. The measured target in that case would be an extension towards the
1.30 handle. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that GBPUSD is
approaching the neckline area around the 1.28 handle where we can find a strong
resistance as the price has previously reacted multiple times. We can also
notice that the downward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> that was
defining the downtrend got broken, so if we break above the resistance, the
market structure would become bullish. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
have another upward trendline that is defining the current bullish momentum as
we approach the resistance. That’s where we can expect the sellers piling in
with a defined risk above the resistance to target the 1.26 support with a
break below the trendline seeing even more sellers jumping onboard. The buyers,
on the other hand, will want to see the price breaking above the resistance to
pile in even more aggressively and extend the rally towards the 1.30 handle. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is
pretty empty on the economic data side as we will only have the PMIs tomorrow
and the US Jobless Claims on Thursday. Given the strong appreciation in the US
Dollar seen in the past weeks, we can expect some USD weakness if the data
misses expectations, and we will likely need much stronger than expected
readings to see another sustained rally in the greenback. Remember also that
this is the Jackson Hole Symposium week, so we will hear from many central
bankers including Fed Chair Powell, who is set to speak on Friday. </p>

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