GBPUSD Technical Analysis – Watch these key resistance zones

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 market expects the first rate
    cut in August.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD is
pulling back into some key resistance levels
with even a possible break and retest pattern around the 1.25 handle. In fact,
we can see that the sellers will have two short opportunities:

  • The first one around the 1.25 handle where they
    will also find the confluence of the
    38.2% Fibonacci retracement level
    and the blue 8 moving average.
  • The second one around the 1.26 handle where they
    will find the confluence of the trendline, the
    61.8% Fibonacci retracement level and the red 21 moving average.

The buyers, on the other hand, will need to break
above the trendline to turn the trend around and start targeting a new cycle
high.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more clearly the
bearish setups around the 1.25 and the 1.26 handles. If the price were to break
above the 1.25 resistance zone, we can expect the buyers to increase the
bullish bets into the trendline targeting a break above it. There’s not much
else to glean from this chart, so we need to zoom in to see some more
details.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price has been diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the ultimate target for the pullback should be the
base of the divergent formation around the 1.26 handle with a break above it
confirming a reversal. In case, we get a rejection from the 1.25 resistance,
the buyers might lean on the black counter-trendline to position for a rally
into the major trendline. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into new lows.

Upcoming Events

Today we get the latest US Jobless Claims figures,
while tomorrow we conclude the week with the UK Retail Sales.

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