GBPUSD Technical Analysis – Watch this key resistance

<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><a href="https://www.forexlive.com/news/us-june-cpi-02-mm-versus-02-mm-expected-20230810/">Inflation</a> measures
since then showed further disinflation. </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>Overall, the economic data started to surprise to
the downside lately.</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.</li><li>The Fed members are leaning more towards a pause in
September.</li><li>The market doesn’t expect the Fed to hike at the September
meeting, but there’s now a 50/50 chance of a hike in November.</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 preference for a “high 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 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 bounced
around the 1.2450 level and it’s now probably pulling back to retest the broken
<a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support turned resistance</a> at the
1.26 handle. In fact, there’s some good <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> there as
we can find also the downward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> and red
21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>. The
sellers are likely to step in there with a defined risk above the trendline and
target a fall into the 1.2310 level. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the price on
this timeframe made a higher high recently and the moving averages have crossed
to the upside. So, the short term market structure is now bullish and we should
see a rally into the 1.26 handle where we can also find the <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> levels
for further confluence. This remains a sellers’ market as the buyers will need
the price to break above the trendline with conviction to invalidate the
bearish bias. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
started to <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverge</a> with
the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> after
the breakout. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, the price broke above the short term
trendline and confirmed the reversal that should go on until the 1.26 handle.
Today we have the UK Jobs report and strong figures, especially on the wages
side, should give the pair a boost and take it into the resistance zone. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> we have many important events beginning with
the UK Jobs report today. The data shouldn’t change much the expectations for
the upcoming BoE meeting, but it can influence the market pricing beyond the
September meeting. A strong report is likely to boost the GBP in the short
term, while a weak one should weaken it. Tomorrow it will be the time for the
US CPI, which is expected to show an increase in headline inflation but further
disinflation in the core measure. On Thursday, we will see the latest US Jobless
Claims, PPI and Retail Sales data. Finally on Friday, we get the University of
Michigan Consumer Sentiment report. </p>

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