GBPUSD Technical Analysis – We finally broke out of the range

<p>USD</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/federal-reserve-leaves-rates-unchanged-at-525-550-20240131/">left interest rates unchanged</a> as
expected while dropping the tightening bias in the statement but adding a
slight pushback against a March rate
cut.</li><li><a href="https://www.forexlive.com/centralbank/powell-qa-we-want-to-see-a-continuation-of-good-inflation-data-to-gain-confidence-20240131/">Fed Chair Powell</a> stressed
that they want to see more evidence of inflation falling back to target and
that a rate cut in March is not their base case. </li><li>The latest <a href="https://www.forexlive.com/news/us-q4-advance-gdp-33-vs-20-expected-20240125/">US GDP</a> beat
expectations by a big margin.</li><li>The <a href="https://www.forexlive.com/news/us-december-pce-core-inflation-29-yy-vs-30-expected-20240126/">US PCE</a> came
mostly in line with expectations with the Core 3-month and 6-month annualised
rates falling below the Fed’s 2% target. </li><li>The <a href="https://www.forexlive.com/news/us-january-non-farm-payrolls-353k-vs-180k-expected-20240202/">US NFP</a> report
beat expectations across the board by a big margin.</li><li>The <a href="https://www.forexlive.com/news/us-january-ism-manufacturing-491-vs-470-expected-20240201/">ISM Manufacturing
PMI</a>
surprised to the upside with the new orders index, which is considered a
leading indicator, jumping back into expansion. Similarly, the <a href="https://www.forexlive.com/news/ism-nonmanufacturing-pmi-for-january-534-versus-520-estimate-20240205/">ISM Services PMI</a> beat
expectations across the board with the employment sub-index erasing the prior
drop and prices paid jumping above 60. </li><li>The <a href="https://www.forexlive.com/news/us-january-consumer-confidence-1148-vs-1150-expected-20240130/">US Consumer
Confidence</a> report came in line with expectations but
the labour market details improved considerably.</li><li>The market now expects the first rate cut in May. </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-20240201/">left interest rates unchanged</a> as expected at the last meeting
removing the tightening bias but reaffirming that they will keep rates high for
sufficiently long to return to the 2% target.
</li><li>The latest <a href="https://www.forexlive.com/news/uk-november-ilo-unemployment-rate-42-vs-42-expected-20240116/">employment report</a> showed job losses in December and
lower than expected wage growth.</li><li>The <a href="https://www.forexlive.com/news/uk-december-cpi-40-vs-38-yy-expected-20240117/">UK CPI</a> beat expectations across the board, which gives
the BoE a reason to remain patient. </li><li>The latest <a href="https://www.forexlive.com/news/uk-january-flash-services-pmi-538-vs-532-expected-20240124/">UK PMIs</a> showed the Manufacturing sector improving but
remaining in contraction while the Services sector continues to expand. </li><li>The latest <a href="https://www.forexlive.com/news/uk-december-retail-sales-32-vs-05-mm-expected-20240119/">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 May.</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD finally
broke out of the range and quickly fell to the next <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a> zone
around the 1.25 handle 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 <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a>. This is
where the buyers stepped in with a defined risk below the level to position for
a rally into new highs. The sellers, on the other hand, will want to see the
price breaking this support as well to start targeting the 1.22 handle.</p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that from a risk
management perspective, the sellers will have a much better risk to reward
setup around the previous <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support now turned resistance</a> where we
can also find the confluence with the 38.2% Fibonacci retracement level and the
red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>. The
buyers, on the other hand, will want to see the price breaking above the
resistance to invalidate the bearish setup and increase the bullish bets into
the next resistance. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that we
have a minor upward <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>
defining the current short term trend to the upside. If the price were to break
below the trendline, we can expect the sellers to pile in already to position
for a break below the 1.25 handle and new lower lows. The buyers, on the other
hand, should keep on leaning on the trendline to continue targeting the 1.26
resistance. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> is basically empty on the data front with just
the latest US Jobless Claims figures on Thursday being the only notable release. </p>

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