GBPUSD Technical Analysis – Look for the break of the “mini” range


  • The Fed left interest rates unchanged as
    expected at the last meeting and dropped the tightening bias in the statement.
  • The US PCE came
    in line with expectations.
  • The US Jobless Claims missed
    expectations although the data is still in the recent ranges.
  • The latest US ISM
    Manufacturing PMI missed expectations by a big margin.
  • The US Consumer
    missed expectations across the board.
  • The market expects the first rate cut in June.


  • The BoE left interest rates unchanged 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.
  • The employment report beat expectations across the board
    with a positive revision to the December’s negative payroll figure.
  • The UK CPI missed expectations across the board but with
    Services inflation remaining sticky, which continues to support the BoE’s
    patient stance.
  • The latest UK PMIs improved from the prior month with the
    Services PMI beating expectations and the Manufacturing PMI missing.
  • The market expects the first rate
    cut in June.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD continues
to trade inside the range with a bullish bias as the price has been printing
higher highs and higher lows lately. The pair recently fell into the 1.2612 support where we
had also the red 21 moving average for confluence. The
price bounced strongly following the big miss in the US ISM Manufacturing PMI
and rallied all the way back to the recent high around the 1.27 handle. There’s
not much else to glean from this chart so we need to zoom in to see some more

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4
hour chart, we can see more clearly the key resistance zone around the 1.27
handle where the sellers have been stepping in for a couple of weeks now. We
have this mini range between the 1.2612 support and the 1.27 resistance that
the pair will need to break before we start to look at the next targets. We can
expect though that a break to the upside should lead to a rally into the 1.28
resistance, while a break to the downside is likely to trigger a selloff into
the 1.25 support.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have another interesting zone around the 1.2650 level where the price reacted
to for several times in the past couple of weeks. This is where we can expect
the buyers to step in with a defined risk below it to position for a rally into
the 1.27 handle targeting a breakout. The sellers, on the other hand, will want
to see the price breaking lower to pile in and target a break below the 1.2612

Upcoming Events

This week we have lots of important events on the agenda
with the release of the US labour market data and the Fed Chair Powell
testifying to Congress. We begin today with the US ISM Services PMI. Tomorrow,
we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. On
Thursday, we get the latest US Jobless Claims figures, while on Friday we
conclude the week with the US NFP report.

This article was written by FL Contributors at Source