USD
- The Fed left interest rates unchanged as expected at the last meeting with basically no
change to the statement. The Dot Plot still showed three rate cuts for 2024 and
the economic projections were upgraded with growth and inflation higher and the
unemployment rate lower. - The US CPI beat expectations for the third
consecutive month, while the US PPI came in line with forecasts. - The US NFP beat expectations across the board
although the average hourly earnings came in line with forecasts. - The US ISM Manufacturing PMI beat expectations by a big margin with
the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
the lowest level in 4 years. - The US Retail Sales beat expectations across the board by a
big margin with positive revisions to the prior figures. - The market now expects the first rate cut in
September.
GBP
- The BoE left interest rates unchanged as expected but with Haskel and
Mann this time voting for a hold instead of a hike. - The employment report missed expectations with a big jump
in the unemployment rate although the wage growth increased. - The UK CPI beat expectations with Services inflation
remaining sticky, which continues to support the BoE’s patient stance. - The latest UK PMIs showed the Services PMI missing expectations
slightly and the Manufacturing PMI beating. - The UK Retail Sales missed expectations across the
board. - The market expects the first rate
cut in August.
GBPUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that GBPUSD pulled
back into the broken support turned resistance around
the 1.25 handle and extended the selloff into the 1.23 handle where we got a
small bounce. We can notice that the price is again a bit overstretched as
depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.
GBPUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the price is diverging with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it could be a signal for a pullback into the minor
black trendline where we
can also find the confluence of the Fibonacci retracement levels
and the red 21 moving average. This is where we can expect the sellers to step
in with a defined risk above the trendline to position for a drop into new
lows. The buyers, on the other hand, will want to see the price breaking higher
to invalidate the bearish setup and position for a rally into the major
trendline around the 1.25 handle.
GBPUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see more
closely the bearish setup around the 1.24 handle. Watch out for the UK and the
US PMIs today as they will be market moving events and will likely trigger the
outlined setups.
Upcoming Events
Today we get the UK and the US Flash PMIs. On
Thursday we will see the latest US Jobless Claims figures, while on Friday we
conclude the week with the US PCE report.
This article was written by FL Contributors at www.forexlive.com. Source