GBPUSD: Uncertainty Continues as Economic Reports Awaited

<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 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 recent <a href="https://www.forexlive.com/news/us-september-pce-core-37-vs-37-expected-20231027/">US Core PCE</a> came
in line with expectations. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> is
starting to show some weakness as <a href="https://www.forexlive.com/news/us-weekly-initial-jobless-claims-217k-vs-210k-expected-20231102/">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-october-consumer-confidence-1026-vs-1000-expected-20231031/">US Consumer
Confidence</a> and <a href="https://www.forexlive.com/news/us-november-prelim-umich-consumer-sentiment-604-vs-637-expected-20231110/">University of
Michigan Consumer Sentiment</a> continue to fall.</li><li>The recent <a href="https://www.forexlive.com/news/us-september-ism-manufacturing-pmi-467-vs-490-expected-20231101/">US ISM
Manufacturing PMI</a> missed expectations by a big margin,
followed by a disappointing <a href="https://www.forexlive.com/news/us-october-ism-services-518-vs-530-expected-20231103/">ISM Services PMI</a>,
although the latter remained in expansion.</li><li>The recent Fedspeak has been leaning on
the hawkish side, but the inflation and labour market reports before the next
meeting will decide whether they will indeed hike or not.</li><li>The <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">market</a> doesn’t
expect the Fed to hike anymore.</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>BoE <a href="https://www.forexlive.com/centralbank/boes-bailey-inflation-is-still-too-high-20231102/">Governor Bailey</a> repeated 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-september-payrolls-change-11k-vs-0k-prior-20231017/">employment report</a> showed a slowdown in wage growth
and some job losses in September which are pointing to a softening labour
market. </li><li>The recent <a href="https://www.forexlive.com/news/uk-september-cpi-67-vs-66-yy-expected-20231018/">UK CPI</a> slightly beat expectations but given the
softening in the labour market it’s unlikely to change the BoE’s stance. </li><li>The <a href="https://www.forexlive.com/news/uk-october-flash-services-pmi-492-vs-493-expected-20231024/">UK PMIs</a> showed further contraction in the services
sector, which accounts for 80% of UK’s economic activity.</li><li>The market doesn’t expect the BoE to
hike anymore.</li></ul><p>GBPUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that GBPUSD managed
to break above the 1.23 handle at the start of the month but erased most of the
gains as the US Dollar got supported by rising Treasury yields. The price
recently bounced on the red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a> as the
buyers continue to target a bigger correction into the 1.25 handle. The pair at
the moment is in a kind of a limbo, but the bias is skewed to the upside given
the series of higher highs and higher lows and the moving averages being
crossed to the upside. </p><p>GBPUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the pair last
week bounced on the 1.22 handle where we had also the 61.8% <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>. The
break above the counter-<a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> saw more
buyers piling in as the momentum favoured the upside. The sellers are likely to
lean on the 1.23 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> again to
position for a bigger drop into the lows, so the buyers will need to break
above that level to increase the bullish bets. </p><p>GBPUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
buyers are likely to lean on the upward trendline as they have also the
confluence with the 38.2% Fibonacci retracement level and the red 21 moving
average. The sellers, on the other hand, will want to see the price breaking
lower to invalidate the bullish setup and position for new lower lows. Watch
out for the UK jobs data at the top of the hour.</p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">This week</a> we have some top tier economic releases. Today,
at the top of the hour we will see the UK jobs data while later in the day, we
will also get the US CPI report which might be one of the most important events
of the week. Tomorrow, we have the UK CPI report and the US Retail Sales and
PPI data. On Thursday, the market will be focused on the latest US Jobless
Claims figures, while on Friday we conclude the week with the UK Retail Sales. </p>

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