GBPUSD Technical Analysis – New lows expected

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-interest-rate-decision-25-bps-rate-hike-to-525-550-20230726/">hiked by 25 bps</a> as
expected and kept everything unchanged at the last meeting.</li><li>Fed Chair Powell reaffirmed their data dependency
and kept all the options on the table.</li><li>The <a href="https://www.forexlive.com/news/us-august-cpi-06-mm-versus-06-mm-expected-20230913/">US CPI</a>
yesterday came in line with expectations, so the market’s pricing remained
roughly the same. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a>
displayed signs of softening although it remains fairly solid.</li><li>Last week the <a href="https://www.forexlive.com/news/us-august-ism-services-545-vs-525-expected-20230906/">ISM Services PMI</a> and <a href="https://www.forexlive.com/news/us-weekly-initial-jobless-claims-216k-vs-234k-expected-20230907/">Jobless Claims</a>
surprised to the upside, which point to a resilient economy overall. </li><li>Yesterday, we got yet another beat in <a href="https://www.forexlive.com/news/us-initial-jobless-claims-220k-versus-225k-estimate-20230914/">Jobless Claims</a> followed
by strong <a href="https://www.forexlive.com/news/us-august-retail-sales-06-versus-02-expected-20230914/">Retail Sales</a> and <a href="https://www.forexlive.com/news/us-august-ppi-16-yy-vs-12-expected-20230914/">PPI</a> data. </li><li>The Fed members are leaning more towards a pause in
September and the next decision will still be dictated by the economic data. </li><li>The market doesn’t expect the Fed to hike at the
September meeting and there’s just a 33% chance of a hike in November, although
that can change if the data keeps on running hot. </li></ul><p>UK:</p><ul><li>The BoE <a href="https://www.forexlive.com/centralbank/boe-raises-bank-rate-by-25-bps-to-525-as-expected-20230803/">hiked by 25 bps</a> as expected at the last
meeting. </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 “high for longer” stance rather than keeping with
additional rate hikes. </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, and the <a href="https://www.forexlive.com/news/uk-july-cpi-68-vs-68-yy-expected-20230816/">UK CPI</a> beat expectations the last time pointing to a
stagflation. </li><li>The <a href="https://www.forexlive.com/news/uk-august-flash-services-pmi-487-vs-510-expected-20230823/">UK PMIs</a> recently missed expectations across the board
with the Services sector plunging into contraction.</li><li>The market expects the BoE to hike
by 25 bps at the upcoming meeting.</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD is in a
clear downtrend with the price printing lower lows and lower highs and the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> being
crossed to the downside. After the break of the key 1.2593 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a>, the
price started to fall in a sustained way as the US data kept on surprising to
the upside and the UK data deteriorated. </p><p>From a risk management perspective, the sellers
would be better off if the price pulled back into the downward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> where we
have also the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
red 21 moving average to position for another selloff with a tight risk, but
it’s hard to see a reason for such a big pullback given the state of things. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we have a <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">divergence</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, the price can either pull back into the <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support turned resistance</a> around
the 1.2440 level or the swing high at 1.2540 where we can also find the 38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
for confluence. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see the
resistance around the 1.2440 level where we have also the 38.2% Fibonacci
retracement level. This is where the sellers should pile in with a defined risk
above the resistance to position for a fall into the 1.2310 level.
Alternatively, if the price breaks through the resistance, the sellers will be
waiting around the 1.2540 level where they will have an even better risk to
reward setup. The buyers, on the other hand, will want to see the price
breaking resistances to pile in and ride the pullbacks. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> the only notable
report left to be released for this week is the University of Michigan Consumer
sentiment survey. Consumer sentiment might have deteriorated given higher
energy prices and that might have filtered to higher inflation expectations. </p>

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