On the daily chart GBPUSD below, we can see that the buyers couldn’t sustain the breakout of the range and folded as the selling pressure prevailed. The top of the range is a very strong level, so it will be eyed in case the price starts to rally above it again.
The daily uptrend is still intact with the moving averages well crossed to the upside. Today we have the US CPI report, and the market may not move much ahead of the data. It’s likely that we will see the buyers in control if the data misses expectations, while the sellers are likely to prevail in case the data beats estimates.
GBPUSD technical analysis
On the 4 hour chart below, we can see that the price has been trending upwards in a channel-like fashion. There is also a big divergence between the channel and the MACD.
This can be a bad omen for the buyers in case the price breaks below the channel as the natural target should be the 1.20 handle. This is what the sellers will want to see before piling in. The buyers will need to break above the 1.2444 resistance again to get more conviction and target new higher highs.
On the 1 hour chart below, we can see the near-term price action with again two failed breakouts. We should see the buyers succeed today if the CPI data misses expectations as that is likely to create a positive sentiment, which would pressure the USD.
The levels to watch for the sellers, on the other hand, are the swing low support at 1.2405 and the bottom of the channel. A break below both levels will give them more conviction to keep selling and target the 1.20 level. In the end, everything will come down to the data.
