GBPUSD Technical Analysis – The break of the range is a bearish signal

<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.</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 <a href="https://www.forexlive.com/news/us-june-cpi-02-mm-versus-02-mm-expected-20230810/">Core CPI M/M</a> figures
coming in at 0.16%.

</li><li>The <a href="https://www.forexlive.com/news/us-august-sp-global-services-flash-pmi-510-vs-522-expected-20230823/">US
PMIs</a> missed expectations across the board and brought down Treasury yields weakening
the US Dollar, but the <a href="https://www.forexlive.com/news/us-initial-jobless-claims-230k-vs-240k-estimate-20230824/">US
Jobless Claims</a> came out better than expected once again and supported the
USD.</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 key economic data like 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 <a href="https://www.forexlive.com/news/uk-august-flash-services-pmi-487-vs-510-expected-20230823/">UK PMIs</a> missed expectations across the board with the
Services sector plunging into contraction.</li><li>The 25 bps hike in September now
looks much less certain.</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD
eventually broke through the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> zone
around the 1.2593 level as the sellers leant on the red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> and
increased the selling pressure as the UK PMIs missed expectations by a big
margin. This breakout opened the door for much lower prices with the first
target coming at 1.2310. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we had a range
between the 1.2593 support and 1.2800 resistance. As expected, the sellers
piled in around the resistance with a defined risk above the level and
positioned for a break below the support. Now, we should see more sellers coming
into the market at every pullback and the first one may happen on a retest of
the broken <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support now turned resistance</a>. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
have some good <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> around
the broken support where the sellers can step in. In fact, we can find the
previous swing low level, the red 21 moving average and the 38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci
retracement</a> level. The buyers will need the price to
break above this strong zone to invalidate the bearish setup and position for
another rally into the resistance. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> the only major
event is Fed Chair Powell’s speech at the Jackson Hole Symposium. The
expectations though are for him to take a “wait and see” approach as we have
more key economic data ahead before the next FOMC meeting. </p>

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