GBPUSD Technical Analysis – Waiting for the breakout of the range

<p>USD</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 at the last meeting 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 <a href="https://www.forexlive.com/news/us-september-pce-core-35-vs-35-expected-20231130/">US Core PCE</a> last
week came in line with forecasts with the disinflationary progress continuing
steady. </li><li>The labour market is starting to show weakness as <a href="https://www.forexlive.com/news/us-initial-jobless-claims-218k-vs-220k-estimate-20231130/">Continuing Claims</a> are now
rising at a fast pace and the recent <a href="https://www.forexlive.com/news/us-october-non-farm-payrolls-150k-vs-180k-expected-20231103/">NFP</a> report
missed across the board. </li><li>The <a href="https://www.forexlive.com/news/us-november-ism-manufacturing-pmi-467-vs-476-expected-20231201/">ISM Manufacturing
PMI</a>
last week missed expectations falling further into contraction. </li><li>The recent <a href="https://www.forexlive.com/news/us-november-consumer-confidence-1020-vs-1010-expected-20231128/">US Consumer
Confidence</a> report beat expectations although the
details about the labour market continued to weaken. </li><li>The hawkish Fed members recently shifted
their stance to a more neutral position.</li><li>The market expects the Fed to start cutting rates
as soon as Q1 2024. </li></ul><p>GBP</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 at the last meeting.</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>The BoE members continue to repeat
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-october-payrolls-change-33k-vs-11k-prior-20231114/">employment report</a> beat expectations with wage growth
remaining at elevated levels. </li><li>The recent <a href="https://www.forexlive.com/news/uk-october-cpi-46-vs-48-yy-expected-20231115/">UK CPI</a> missed expectations across the board, which was
a welcome development for the BoE.</li><li>The <a href="https://www.forexlive.com/news/uk-november-flash-services-pmi-505-vs-495-expected-20231123/">UK PMIs</a> beat expectations on both the Manufacturing
and Services measures, with the Services sector crawling back in expansion.</li><li>The latest <a href="https://www.forexlive.com/news/uk-october-retail-sales-03-vs-03-mm-expected-20231117/">UK Retail Sales</a> missed expectations across the
board by a big margin as consumer spending remains weak.</li><li>The market expects the BoE to start
cutting rates in Q3 2024</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD got
stuck in a range between the 50% and the 61.8% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> levels
as the market is probably waiting for a catalyst to choose the next direction.
A break to the upside should see the pair reaching the 1.30 handle, while a
break to the downside is likely to trigger a selloff at least into the 1.22
handle. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the pair has
been <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> for
quite some time now. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. The tight range between the 1.26 support
and the <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> at
1.2730 gives us a clear playbook as a break to the downside should confirm the
divergence and likely lead to a drop into the base of the divergent formation
around the 1.2370 level. On the other hand, a break to the upside could
invalidate the bearish setup and trigger a rally into the 1.30 level.</p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see more
closely the rangebound price action between the Fibonacci levels with a divider
in between kind of acting as a barometer for the short term sentiment. There’s
not much to do here other than waiting for a clear breakout, especially if
supported by a fundamental catalyst. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">This week</a> we will see lots of US labour
market data culminating with the NFP release on Friday. Today, we have the ISM
Services PMI and the US Job Openings reports. Tomorrow, we will get the US ADP
data. On Thursday, it will be the time for the US Jobless Claims figures, while
on Friday we conclude the week with the NFP report. </p>

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