GBPUSD Technical Analysis - Will the November low hold?
Fundamental Overview . . The USD got a boost from the FOMC decision as the market perceived it as more hawkish than expected. Overall, apart from some slight tweaks, the Fed matched the market’s ...
FundamentalOverview
The USD got a boost fromthe FOMC decision as the market perceived it as morehawkish than expected. Overall, apart from some slight tweaks, the Fed matchedthe market’s pricing. Nonetheless, the market reacted in a big way pushingTreasury yields higher and giving the USD a tailwind.
The data is what reallymatters now as it will decide what the Fed is going to do. They switched theirfocus on inflation again, so it will likely take just one soft CPI report inJanuary to see the market reacting in a dovish way sending Treasury yields andthe US Dollar lower.
On the GBP side, BoEkept the Bank Rate unchanged yesterday as expected although we got a moredovish than expected vote split as 3 voters wanted a rate cut compared to just1 expected.
The market is pricing a 55%chance of no change at the upcoming meeting in February and a total of 56 bpsof easing by the end of 2025 which is slightly more than it was before the BoEdecision.
GBPUSDTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that GBPUSD eventually fell all the way back to the November low around the1.2485 level. This is where we can expect the buyers to step in with a definedrisk below the level to position for a rally into the 1.28 handle. The sellers,on the other hand, will want to see the price breaking lower to increase thebearish bets into the 1.23 handle next.
GBPUSD TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we have a strong resistancezone now around the 1.26 handle. From a risk management perspective, thesellers will have a better risk to reward setup around the resistance, whilethe buyers will look for a break higher to increase the bullish bets into the1.28 handle.
GBPUSD TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, there’snot much else we can add here as the buyers will look for a pullback into the1.26 handle, while the sellers will look for a break lower or wait for thepullback to short at better levels. The red lines define the average daily range for today.
UpcomingCatalysts
Today, we conclude the week with the US PCE data.
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