On the daily GBPUSD chart below, we can see that the price has reached the top of the range at 1.2444. This is a significant level for both buyers and sellers. The buyers will want to see a clear break above the level to get the conviction and step in to target new higher highs.

The sellers, on the other hand, are likely to pile in here with defined risk above the level and target the bottom of the range at 1.1839. From a risk management perspective, the sellers have clearly a better setup technically speaking.

Looking at the fundamentals, the US Dollar is suffering due to the market trading on interest rates expectations as the Fed is seen to end the hiking cycle at the next meeting and start cutting soon after.

But the USD appreciates during a recession as a safe haven, and yesterday we got a very weak ISM Manufacturing PMI report. This latest push to the upside may be just a squeeze.

GBPUSD Technical Analysis

On the 4 hour chart below, we can see that the price did a fakeout when it broke below the trendline. This is a rising wedge pattern with a big divergence, as depicted by the MACD, that formed right at a key resistance level. All the pieces of the puzzle are in favour of the sellers here. When the price breaks the wedge, it generally falls all the way back to the bottom of the pattern, which in this case is at the 1.20 handle. Nevertheless, the price rallied strongly yesterday back to the top, even after the very weak ISM Manufacturing PMI.

On the 1 hour chart below, we can see more closely the very strong rally that started at the open of the European Session. This looks like a squeeze on dollar longs, but we may need to wait for the next economic data like the ISM Services PMI tomorrow to see how it all evolves. The sellers are likely to pile in both at the top of the range and at the break below the trendline (if we get one).