On the daily chart below for GBPUSD, we can see that the last two tries from the buyers of breaking above the top of the range and sustain a bullish trend failed. The first one failed due to bad top tier US economic data Economic Data Economic data typically comes in the form of news releases that are disseminated daily. This information is extremely valuable to retail and institutional forex traders, given the influence such data has on currency rates.Most of the major economic events that are released are reported by sovereign governments throughout the globe. Moreover, there are several economic data points that are released by private organizations that can also move the market.By and large, when new information becomes a Economic data typically comes in the form of news releases that are disseminated daily. This information is extremely valuable to retail and institutional forex traders, given the influence such data has on currency rates.Most of the major economic events that are released are reported by sovereign governments throughout the globe. Moreover, there are several economic data points that are released by private organizations that can also move the market.By and large, when new information becomes a Read this Term that scared the market and turned the sentiment into risk-off.

The price then rallied as the US NFP surprised again expectations with strong jobs numbers and lower wage pressures. Last Friday though the US retail sales missed expectations across the board sending the price lower again as the USD is favoured in times of recessions.

The move lower was also boosted later as the 1 year inflation expectations in the University of Michigan survey showed a big jump to the upside making the market to price out some of the rate cuts previously factored in. The price is now finding support at the red long period moving average and this will be something to watch if the price then breaks below it.

GBPUSD Technical Analysis

On the 4 hour chart below, we can see that the whole move from the 1.20 handle was diverging with the MACD trading into the top of the range. This is generally a sign of a weakening momentum and generally we can see pullbacks or reversals. In this case, we got many pullbacks as the price traded in a channel-like fashion.

The latest move lower broke below the lower bound of the channel and this may be a bad omen for the buyers. In case the sellers take control, we may see a big bearish move to the bottom of the channel at 1.20. The buyers will want the price to break above the top of the range again to get the conviction to keep charging higher.

On the 1 hour chart below, we can see that short-term bearish move is bouncing near the previous swing level. This morning the UK Employment report showed that wage inflation is still high and it should force the BoE to keep hiking interest rates. In fact, the GBP got a boost from the data, and it’s now expected to rally towards the zone between the 38.2% Fibonacci retracement level and the top of the range at 1.2444.

The sellers are likely to lean on that zone to try some shorts, but the best signal for them would be a break below the swing level at 1.2344, because that would confirm the big bearish setup and should lead to a move towards the 1.20 handle.