GBPUSD Technical Analysis – Awaiting the NFP

Since the last FOMC meeting
the US economic data surprised consistently to the upside leading to a more
hawkish pricing for interest rates expectations. In fact, Fed Chair Powell said
that the majority of the FOMC expects two or more rate hikes coming if the
economy performs as expected.

Conversely, the UK
employment and inflation reports keep on being too hot and the BoE is expected
to keep hiking with a terminal rate now standing somewhere above the 6% level.
BoE’s Governor Bailey has repeated that they are committed in bringing
inflation back to target and will do what is necessary remaining data

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the price has
recently bounced on the red 21 moving average and
avoided a bearish crossover. The bullish trend remains intact for now, but a
lot will depend on the next NFP and CPI reports as the market is basically
ranging waiting for the data releases.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
rallied strongly back above the 1.2680 level and pulled back into the red 21
moving average and the 50% Fibonacci retracement level
before bouncing back again. We’re now seeing some consolidation here as
liquidity today is thinner due to the US being on holiday and the market
awaiting the data.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
might have a bullish flag
pattern forming here. If the price breaks above the black trendline, we
should expect the buyers piling in and extend the rally to the 1.2847 high. On
the other hand, if the price breaks below the support zone
and the 50% Fibonacci level, we can expect the sellers extend the fall into the
major blue trendline targeting eventually a break lower.

Upcoming Events

Today it’s Independence
Day in the US, so liquidity will be thinner, but we’ll have some major events
in the following days such as the US Jobless Claims and ISM Services PMI on
Thursday and the main event of the week: the US NFP on Friday.

This article was written by FL Contributors at Source