FundamentalOverview

The US Dollar continues toconsolidate despite the higher-than-expected inflation figures and a lessdovish Powell last week. The market’s pricing remained largely unchanged atthree rate cuts by the end of 2025.

This is generally a signalthat the market is fine with the current pricing, and we would need strongerreasons to price out the remaining rate cuts. This could lead to some generalUS Dollar weakness in the short term.

On the GBP side, this weekwe got the UK CPI report with the data coming in higher thanexpected. This saw the market strengthening the chances of no change at theDecember BoE meeting but overall the pricing remained unchanged around 67 bpsof easing by the end of 2025.

GBPUSDTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that GBPUSD continues to consolidate near the major upward trendline. This is where the buyers arestepping in with a defined risk below the trendline to position for a rallyinto new highs. The sellers, on the other hand, will want to see the pricebreaking lower to increase the bearish bets into new lows.

GBPUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the pair looks to be bottoming out here and we might see a pullbackinto the major downward trendline. The buyers will want to see the pricebreaking above the 1.27 handle to gain more conviction, while the sellers willlikely lean on that level to target the break below the upward trendline.

GBPUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that the price action has been mostly rangebound since last Thursday asthat’s when the bullish momentum in the US Dollar stalled. There’s not much wecan add here as the buyers will look for a break above the 1.27 handle, whilethe sellers will target a break below the trendline. The red lines define the average daily range for today.

UpcomingCatalysts

Today we get the latest US Jobless Claims figures, while tomorrow we concludethe week with the UK and the US PMIs.