GBPUSD Technical Analysis – Signs of an imminent pullback

<p>The US
economic data keeps on showing a resilient economy and as a consequence the
higher for longer stance becomes more and more certain which is making Treasury
yields to rally. This has been supporting the USD as we’ve been seeing a
divergence in the data with the other major economies. The recent <a href="https://www.forexlive.com/news/us-july-retail-sales-07-versus-04-expected-20230815/">Retail Sales</a> data
showed also that consumer spending remains strong and it might either lead to
more inflation or keep inflation high for longer. </p><p>On the other hand, the BoE
hiked by 25 bps as expected as the <a href="https://www.forexlive.com/news/uk-june-cpi-79-vs-82-yy-expected-20230719/">UK CPI</a> missed expectations across the board and UK <a href="https://www.forexlive.com/news/uk-june-payrolls-change-9k-vs-23k-prior-20230711/">employment report</a> showed a mixed picture with both
the unemployment rate and wage growth higher. 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. This week we got the <a href="https://www.forexlive.com/news/uk-july-payrolls-change-97k-vs-9k-prior-20230815/">employment report</a> showing 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 a stagflation.
The BoE will hike by another 25 bps in September but things are looking ugly
for the UK. </p><p>GBPUSD Technical
Analysis – Daily Timeframe</p><p>On the daily chart, we can see that we have a
strong <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> zone
around the 1.2593 level where we have also the 38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level.
In fact, we can see that the price has bounced twice from there which might end
up being a <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">double bottom</a>. The <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving averages</a> are crossed
to the downside and the bias remains bearish as the price continues to print
lower highs. If the support gives way, we are likely to see a fall into the
1.2310 swing low level. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we have a
strong downward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> that’s
been acting as a reliable resistance for the sellers. In fact, we can see that
after the initial spike after the UK CPI data, the sellers piled in again and
the price fell to the levels seen before the CPI release. The buyers will want
to see the price breaking above the trendline to have even more conviction on
the upside and target the 1.2847 resistance. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
might have a <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">bullish flag</a>
forming around the trendline. Today’s US Jobless Claims should give the
direction as a break to the upside is likely to lead to a rally into the 1.2847
resistance, while a break to the downside should trigger a selloff into the
1.26 handle. </p><p>Upcoming Events</p><p>Today we will see the latest <a href="https://www.forexlive.com/EconomicCalendar">US Jobless Claims</a>. This
is a key report as the market is particularly focused on the labour market
data. A miss should weaken the USD in the short term as the market will have
another confirmation that the Fed may be done with rate hikes. On the other
hand, a beat should trigger another hawkish repricing and support the
greenback. </p>

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