USD
- The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
- The US PCE came in line with expectations.
- The NFP report beat expectations on the headline number, but the unemployment rate and the average hourly earnings missed notably.
- The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
- The US Consumer Confidence missed expectations across the board.
- The market expects the first rate cut in June.
GBP
- The BoE left interest rates unchanged as expected at the last meeting removing the tightening bias but reaffirming that they will keep rates high for sufficiently long to return to the 2% target.
- The employment report beat expectations across the board with a positive revision to the December’s negative payroll figure.
- The UK CPI missed expectations across the board but with Services inflation remaining sticky, which continues to support the BoE’s patient stance.
- The latest UK PMIs improved from the prior month with the Services PMI beating expectations and the Manufacturing PMI missing.
- The market expects the first rate cut in June.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD recently probed above the top of the range around the 1.28 handle. This is where the sellers are stepping in to position for a drop back into the bottom of the range. The buyers, on the other hand, will want to see the price to continue breaking higher to start targeting the 1.30 handle.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better risk to reward setup around the previous resistance turned support at the 1.27 handle where they will also find the 61.8% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking below that support to increase the bearish bets into the bottom of the range.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price recently broke below the upward trendline signalling a potential shift in the short-term trend. The sellers will likely step in at the downward trendline where there’s also the 50% Fibonacci retracement level for confluence. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally into the 1.30 handle.
Upcoming Events
Today we have the UK Jobs data and later in the day the main event of the week, that is the US CPI report. On Thursday we get the US PPI, the US Retail Sales and the US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment survey.
