USD
- The Fed left interest rates unchanged as expected with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
- Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
- The US CPI and the US PPI beat expectations for the second consecutive month.
- The US Jobless Claims beat expectations across the board.
- The latest US Manufacturing PMI beat expectations while the Services PMI missed slightly. Both the measures remain in expansion though.
- The market expects the first rate cut in June.
GBP
- The BoE left interest rates unchanged as expected but with Haskel and Mann this time voting for a hold instead of a hike.
- The employment report missed expectations with an uptick in the unemployment rate and an easing in wage growth.
- 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 showed the Services PMI missing expectations slightly and the Manufacturing PMI beating.
- The market expects the first rate cut in June.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD sold off hard from the top of the range around the 1.28 handle before bouncing around the 1.26 handle. The price got a bit overstretched as depicted by the distance from the bleu 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is approaching the previous swing low level around the 1.2667 level where we can also find the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. This is where we can expect the sellers to step in with a defined risk above the Fibonacci level to position for a drop into the 1.25 handle. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 1.28 handle.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have now a counter-trendline where we can expect the buyers to lean onto in case we get a pullback. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1.25 handle.
Upcoming Events
Today we have the US Durable Goods Orders and the US Consumer Confidence report. Tomorrow, we have Fed’s Waller speaking. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude with the US PCE and Fed Chair Powell.
