GBPUSD Technical Analysis – Watch these levels for the next direction


  • The Fed left interest rates unchanged as expected at the last meeting.
  • The macroeconomic projections were revised higher,
    and the Dot Plot showed that the FOMC still expects another rate hike by the
    end of the year with less rate cuts projected in 2024.
  • Fed Chair Powell reaffirmed their data dependency but added that
    they will proceed carefully.
  • The US CPI last week beat expectations on the
    headline figures, but the core measures came in line with forecasts and the
    market’s pricing barely changed.
  • The labour market remains fairly solid as seen once again last week
    with the beat in Jobless Claims, although continuing claims surprisingly missed.
  • The US PMIs
    recently showed that the US economy remains pretty resilient.
  • The University of Michigan Consumer Sentiment report last Friday missed across the
    board with the inflation expectations figures spiking back up.
  • The Fed members continue to cite elevated long-term
    yields as a reason to proceed carefully and will likely pause in November as
  • The market doesn’t expect the Fed to hike anymore.


  • The BoE kept interest rates unchanged at the last meeting.
  • The central bank is leaning more
    towards keeping interest rates “higher for longer”, although it kept a door
    open for further tightening if inflationary pressures were to be more
  • Key economic data like the latest employment report showed a very high wage growth
    despite the rising unemployment rate, but the latest UK CPI missed expectations across the board giving
    the BoE a bit of relief.
  • The latest UK PMIs showed further contraction, especially in the
    Services sector.
  • The market doesn’t expect the BoE to
    hike anymore.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the GBPUSD pair
got rejected almost perfectly from the key resistance around
the 1.2310 level where we had the confluence with the
38.2% Fibonacci retracement level
and the trendline. This is
where the sellers stepped in with a defined risk above the trendline to
position for a drop into the 1.1840 level. The buyers will need the price to
break above the trendline to switch the bias from bearish to bullish and start
targeting new higher highs.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the break
below the counter-trendline saw even more sellers piling in and extending the
selloff into the 1.21 handle. Yesterday, we got a nice pullback into the red 21
moving average where we
got a rejection as the sellers leant on the moving average and the previous
swing high level. We can expect the bearish momentum increasing if the UK data
today and tomorrow misses expectations.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
last leg lower diverged with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we got the pullback into the last swing high where the
sellers stepped in to position for another drop into the lows. The buyers, on
the other hand, are likely to pile in around the support at 1.2175 or on a
break above the swing high at 1.2220. If the price breaks below the 1.2175
support, the sellers should gain full control and we will likely see new lows.

Upcoming Events

Today we will get the UK labour market report at the
top of the hour and the US Retail Sales data later in the day. Tomorrow, we
will see the latest UK inflation figures which could be important for the BoE,
especially if the data surprises notably to the upside. On Thursday, we will
get the US Jobless Claims report and we will also hear from Fed Chair Powell.
Finally, on Friday, we conclude the week with the UK Retail Sales data.

This article was written by FL Contributors at Source