GBPUSD Technical Analysis – Key levels in play ahead of the UK Jobs data | Forexlive

USD

• 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 NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Consumer
  Confidence missed expectations across the board.
• The market expects the first rate cut in June.

GBP

• 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 recently
probed above the top of the range around the 1.28 handle. This is where the
sellers are stepping in to position for a drop back into the bottom of the
range. The buyers, on the other hand, will want to see the price to continue breaking
higher to start targeting the 1.30 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a much better risk to reward setup
around the previous resistance turned support at the
1.27 handle where they will also find the 61.8% Fibonacci retracement level
for confluence. The
sellers, on the other hand, will want to see the price breaking below that
support to increase the bearish bets into the bottom of the range.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price recently broke below the upward trendline
signalling a potential shift in the short-term trend. The sellers will likely
step in at the downward trendline where there’s also the 50% Fibonacci
retracement level for confluence. 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 1.30 handle.

Upcoming Events

Today we have the UK Jobs data and later in the day the
main event of the week, that is the US CPI report. On Thursday we get the US
PPI, the US Retail Sales and the US Jobless Claims figures. On Friday, we
conclude the week with the University of Michigan Consumer Sentiment survey.