GBPUSD Technical Analysis – Key levels in focus

<p>US</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-september-pce-core-37-vs-37-expected-20231027/">US Core PCE</a> came
in line with expectations. </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 some weakness as <a href="https://www.forexlive.com/news/us-weekly-initial-jobless-claims-217k-vs-210k-expected-20231102/">Continuing Claims</a> are now
rising at a fast pace and the <a href="https://www.forexlive.com/news/us-october-non-farm-payrolls-150k-vs-180k-expected-20231103/">NFP</a> data
last Friday 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> fell for the third consecutive month
although the data beat expectations.</li><li>The <a href="https://www.forexlive.com/news/us-september-ism-manufacturing-pmi-467-vs-490-expected-20231101/">US ISM
Manufacturing PMI</a> last week missed expectations by a big
margin, followed later on Friday with a disappointing <a href="https://www.forexlive.com/news/us-october-ism-services-518-vs-530-expected-20231103/">ISM Services PMI</a>,
although the index remained in expansion.</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-as-expected-20231102/">kept interest rates unchanged</a> as expected last week.</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-september-payrolls-change-11k-vs-0k-prior-20231017/">employment report</a> showed a slowdown in wage growth
and some job losses in September which are pointing to a softening labour
market. </li><li>The recent <a href="https://www.forexlive.com/news/uk-september-cpi-67-vs-66-yy-expected-20231018/">UK CPI</a> slightly beat expectations but given the
softening in the labour market it’s unlikely to change the BoE’s stance. </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 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
broke out of the key <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> and the <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> around
the 1.23 handle but erased most of the gains ever since. The pair was indeed
overstretched as the price was too distant form the blue 8 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we have a
support zone around the 1.2220 level where there’s also the 61.8% <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>. If the
price gets there, we can expect the buyers to step in with a defined risk below
the support to position for a rally into new highs. The sellers, on the other
hand, will want to see the price breaking lower to increase the bearish bets
into the previous lows. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
now have a resistance zone around the 1.2308 level where we can find the most
recent swing high. A break above this level should give the buyers even more
conviction for a rally into new highs. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> we have the US Jobless Claims on the agenda
while tomorrow it will be the time for the University of Michigan Consumer
Sentiment report. The market is likely to focus on the US Jobless Claims given
the recent weakness in the labour market data. Strong readings are likely to
support the USD, while weak figures should keep on weighing on the greenback in
the short-term. </p>

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