USD
- The Fed left interest rates unchanged as
expected 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. - Fed Chair Powell
maintained a neutral stance as he said that it was premature to react to the
recent inflation data given possible bumps on the way to their 2% target. - The US CPI and
the US PPI beat
expectations for the second consecutive month. - The US Jobless Claims beat
expectations across the board. - The latest US Manufacturing
PMI
beat expectations while the Services PMI missed slightly. Both the measures
remain in expansion though. - The market expects the first rate cut in June.
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 an uptick
in the unemployment rate and an easing in wage growth. - 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 showed the Services PMI missing expectations
slightly and the Manufacturing PMI beating. - The market expects the first rate
cut in June.
GBPUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that GBPUSD spiked
back to the upper bound of the range following the Fed decision but eventually
erased all the gains as the sellers piled in with a defined risk above the
resistance to position for a drop back into the 1.2612 support. The
buyers, on the other hand, will likely step in around the support to position
for a rally back into the resistance targeting a breakout.
GBPUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the price
broke through the support zone around the 1.27 handle following the more dovish
change in the voting split in the BoE rate decision and the stronger US data.
The pair should now reach the 1.2612 support where we will likely get some
reaction as the buyers will want to buy the dip to position for a rally all the
way back to the resistance. If the price were to break below the support
though, we can expect the sellers to increase the bearish bets into the 1.25
handle.
GBPUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that in
case we get a pullback from these levels, the sellers will have a better risk
to reward setup around the 1.27 handle where we can find also the confluence with
the 38.2% Fibonacci
retracement level and the red 21 moving average. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and increase the bullish bets into the 1.28
resistance.
Upcoming Events
Today we conclude the week with the UK Retail Sales
data.
This article was written by FL Contributors at www.forexlive.com. Source