GBPUSD Technical Analysis – The sellers remain in control

US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged at the last meeting.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• Inflation measures
  since then showed further disinflation.
• The labour market
  displayed signs of softening although it remains fairly tight.
• Overall, the economic data started to surprise to
  the downside lately.
• The Fed members are leaning more towards a pause
  rather than another rate hike.
• The market doesn’t expect the Fed to hike anymore.

UK:

• The BoE hiked by 25 bps as expected at the last meeting.
• The central bank seems to be leaning
  more on the less hawkish side as a key line in the statement was tweaked to
  indicate the propensity for a “higher for longer” stance rather than keeping
  with additional rate hikes.
• Recent key economic data like the
  latest employment report showed even more wage growth
  despite the unemployment rate ticking higher again, and the UK CPI beat expectations pointing to stagflation.
• The UK PMIs missed expectations across the board with the
  Services sector plunging into contraction.
• The market expects the BoE to hike
  by 25 bps at the upcoming meeting.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD seems to
be bottoming out around the key support at
1.2593 level. The bias is still bearish though as the price has been printing
lower lows and lower highs and the moving averages are
crossed to the downside. Nevertheless, the buyers should be leaning on this
support with a defined risk below it to target the 1.3141 high. The sellers, on
other hand, are likely to lean again on the red 21 moving average to position
for a break below the support zone.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
recently got rejected from the downward trendline and a
previous swing level, but the buyers keep on defending the support zone. A
break above the trendline should open the door for more upside with the buyers
targeting the 1.28 resistance first and eventually a breakout.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that GBPUSD
broke below the support again and set a new low. The sellers are firmly in
control, but the price is now overextended as depicted by the distance from the
blue 8 moving average. In such instances, we can generally see a pullback into
the moving average or some consolidation before the next move. If the price
pulls back into the previous swing low around the 1.2580 level, we can expect
the sellers to pile in with a defined risk above the level to target a new
lower low. The buyers, on the other hand, will need the price to break above
the last swing high around the 1.2640 to start positioning for more upside.

Upcoming Events

This week is a bit empty on the data front with just the
US ISM Services PMI tomorrow and the US Jobless Claims on Thursday being the
main highlights. The market pricing is unlikely to change unless the data comes
in really hot in which case, we should see the US Dollar strengthening. On the
other hand, weaker readings might just bring forward rate cuts expectations and
weigh on the greenback in the short term.