GBPUSD Technical Analysis – Bulls and Bears are Watching a Key Level

<p>Last week the <a href="https://www.forexlive.com/news/us-june-cpi-yy-30-versus-31-expected-20230712/">US CPI</a> report missed across the board and led to a
strong rally in GBPUSD as the market priced out the more hawkish path for the
Fed and now expects the July hike to be the last one. The resilient labour
market, the rising <a href="https://www.forexlive.com/news/university-of-michigan-preliminary-sentiment-for-july-726-versus-655-estimate-20230714/">consumer sentiment</a> and the better than expected <a href="https://www.forexlive.com/news/usa-june-retail-sales-02-versus-05-expected-20230718/">Retail Sales</a>, have also increased the chances of
getting a soft landing which contributed to the positive risk sentiment and the
USD weakness. </p><p>Conversely, the <a href="https://www.forexlive.com/news/uk-june-cpi-79-vs-82-yy-expected-20230719/">UK CPI</a> this week missed expectations across the board
and triggered a big repricing in interest rates expectations. In fact, the
market was pricing a higher chance of a 50 bps hike prior to the report given
the higher wages data in the previous UK <a href="https://www.forexlive.com/news/uk-june-payrolls-change-9k-vs-23k-prior-20230711/">employment report</a>. Now, the market sees a higher
chance that the BoE hikes by 25 bps at the upcoming meeting. </p><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD had a
massive run to the upside since bottoming out on the red 21 moving average. After
the quick rally following the miss in the US CPI report, the price started to
pull back as the stronger US Retail Sales gave the USD some support. The price
is now close to a key support zone
where we can find the previous swing high level, the 50% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
and the red 21 moving average for confluence. The
buyers are likely to step in here with a defined risk below the level and
target a new high. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see more closely the
key support zone near the 1.2847 level. The price will need to bounce here to
give the buyers the conviction to target new highs as a break lower would
trigger a selloff into the 1.2680 level where we can also find the <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>. That
would also be the first target for the sellers if the price breaks below the
1.2847 level. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
selloff following the miss in the UK CPI report bottomed out on the 50%
Fibonacci retracement level and the price has even broke above the downward
trendline. This might be a sign that the bearish momentum has weakened, and the
buyers may have the upper hand. The price will need to create a new higher high
breaking above the swing high at 1.2962 to confirm the change in trend and see
more buyers piling in. </p><p>Upcoming Events</p><p>Today the market will
focus on the US Jobless Claims report as the labour market data continues to be
at the top of the market’s attention. A small miss or beat shouldn’t be market
moving as the market is more likely to move on big deviations given the
volatility of the report. In fact, a big beat should give the USD some support,
while a big miss should pressure it even more as the market would bring forward
the rate cuts expectations. </p>

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