The crucial 1.23 barrier was breached by the Technical Analysis of GBP/USD pair, which is now chasing the 1.18 handle.
US:
- The Fed maintained interest rates as anticipated.
- The economy has shown significantly greater resilience than anticipated, and the Dot Plot revealed that the majority of members still anticipate another rate hike by year’s end and fewer rate cuts in 2024.
- The Fed Chair Powell reiterated their reliance on data but added that they will move slowly in their search for the ideal rate level. Powell also stated that although they are hoping for a gentle landing, that is not currently the basic case.
- The market’s pricing stayed mostly unchanged as a result of the most recent US CPI meeting forecasts.
- Despite still being pretty strong, the labor market showed symptoms of deteriorating yesterday with the high increase in jobless claims.
- Currently, the market does not anticipate another rate hike from the Fed.
UK:
- Although the central bank is more inclined to keep interest rates “higher for longer,” it left the door open for future tightening if inflationary pressures were to become more enduring.
- Important economic data, such as the most recent employment report, revealed very high wage growth despite a rising unemployment rate, while the most recent UK CPI fell short of forecasts on all counts.
- The UK PMIs for the previous month were below average overall, with the Services sector experiencing a sharp decline.
- The BoE is not anticipated by the market to hike anymore.
USDGBP Daily
On the daily chart, we can see that the Technical Analysis of GBP/USD has finally broken through the important 1.23 barrier, which has allowed for a decline into the 1.18 handle. From a risk management standpoint, if the price pulled back all the way up to the downward trendline, where we can also find the red 21 moving average for confluence, the sellers would have a superior risk-to-reward setup. Though it’s difficult to imagine such a significant rise at the present.
USDGBP 4 hours
On the 4-hour chart, we can see that the pair has been maintaining a modest downward trendline, with the most recent selloff occurring off of the trendline in response to the FOMC dot plot that was more hawkish than anticipated. If there is a pullback, the sellers will probably once more rely on the minor trendline, which also happens to be where the red 21 moving average and the Fibonacci retracement levels meet. On the other hand, if the price moves above the minor trendline, buyers would likely enter the market with a specified risk below the low to position for a rebound and heighten the positive momentum.
USD GBP 1 hour
On the one-hour chart, the major support at 1.2308—now a resistance—and the trendline are more clearly visible as the bearish setup. The sellers are more likely to keep control and pounce on any correction. On the other side, buyers are more inclined to swarm in at any breakthrough.
Future Events
Today we have the UK Retail Sales as well as the US and UK Flash PMIs.
