GBPUSD Technical Analysis – Watch what happens at this resistance zone – ForexLive

USD

The Fed left interest rates unchanged, as expected at its previous meeting, and its statement remained essentially unchanged. The dotplot still shows three rate cuts in 2024, with an upward revision to economic forecasts for higher growth and inflation and lower unemployment.

Fed Chairman Jerome Powell remained neutral, saying it was too early to react to the latest inflation data given the potential for a rise toward the 2% target.

US CPI and US PPI exceeded expectations for the second consecutive month.

U.S. NFPs overall exceeded expectations, but average hourly wages were in line with expectations.

The US ISM Manufacturing PMI was much better than expected as the price component continued to rise, while the US ISM Services PMI was below expectations as the price index fell to a four-year low.

Currently, the chance of a rate cut in June is essentially 50/50.

GBP

As expected, the central bank kept interest rates on hold, but Mr. Haskell and Mr. Mann voted this time to hold rates rather than raise them.

Employment data was lower than expected due to higher unemployment and slower wage growth.

UK CPI was weaker than expected across the board, but services inflation remains sticky, which continues to support the Bank of England’s patient stance.

The latest UK PMI showed that Services PMI was slightly weaker than expected and Manufacturing PMI was above expectations.

Markets expect the first rate cut to occur in June.

GBPUSD Technical Analysis – Daily Timeframe

GBPUSD Daily

On the daily chart, we see GBPUSD trading just below the Red 21 moving average around the 1.2670 level as the market consolidated a bit ahead of the US CPI report. We can expect sellers to intervene near these levels in preparation for a drop to new lows, while buyers seek a break to the upside to increase their bullish bets to the 1.28 resistance.

GBPUSD Technical Analysis – 4 Hour Timeframe

pound dollar 4 hours

On the 4-hour chart, we see a strong resistance zone around the 1.2670 level, which is the confluence of the previous swing level, the 50% Fibonacci retracement level, the trend line, and the daily 21 moving average. This is where sellers are likely to step in with a clear risk above the trend line and prepare for a drop to new lows. On the other hand, buyers are hoping that the price will rise to override the bearish setup and increase their bullish bets to the resistance at 1.28.

GBPUSD Technical Analysis – 1 hour timeframe

pound dollar 1 hour

On the hourly chart, we can see that there is a countertrend line and a red 21 moving average that defines the current short-term uptrend. Buyers may wish to lean on the trend line and set a defined risk below it to position for a breakout with better risk. Sellers, on the other hand, are hoping the price will fall further in order to raise their bearish bets to new lows.