FundamentalOverview

The USD got a bit of aboost on Monday following the better than expected US PMIs although the gains were not widespread. We’vealso seen some bids in the greenback yesterday following the weak US Consumer Confidence where inflation expectations jumpedto yet another high.

Overall, the market isstill pricing between two to three rate cuts this year and the sentimentremains tentative as we approach the Trump’s “Liberation Day” on April 2^nd.

On the GBP side, the UKCPI today missed expectations almost across the board although servicesinflation remains sticky around 5% which is what the BoE is more concernedwith. The market is now seeing higher chances of a rate cut at the upcomingmeeting though. We still have another inflation report before the next BoEdecision, so a rate cut is not a done deal.

GBPUSDTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that GBPUSD eventually pulled back into the trendline as buyers couldn’t push abovethe 1.30 handle. We can expect the buyers to lean on the trendline with adefined risk below it to position for a rally into the 1.31 handle next. Thesellers, on the other hand, will want to see the price breaking lower to pilein for a drop into the next major trendline around the 1.27 handle.

GBPUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee more clearly the bullish setup around the 1.2865 level where we have thetrendline and the swing level where the bullish momentum started to wane from.This looks like a strong supportzone where the buyers can lean onto to position for a continuation of theuptrend. If the price were to break lower though, the sellers will likelyregain control and look for a push towards the next trendline.

GBPUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a downward trendline now defining the bearish momentum on thistimeframe. If we get a pullback into it, we can expect the sellers to step inwith a defined risk above it to position for a break below the 1.2865 supportzone. The buyers, on the other hand, will look for a break higher to increasethe bullish bets into the 1.31 handle next. The red lines define the average daily range for today.

Upcoming Catalysts

Tomorrow we get the latest US Jobless Claimsfigures, while on Friday we conclude the week with the UK Retail Sales and the US PCE report.