Fundamental Overview
The USD continues to remain under pressure amid positive risk sentiment and the imminent rate cuts from the Fed which should help global growth. These are generally bearish drivers for the greenback.
In fact, the appreciation of the GBP has been mostly driven by the US Dollar side of the equation. The market sees a 64% probability that the BoE keeps rates steady in September and then delivers at least two rate cuts by the end of the year.
The focus will be on tomorrow’s Flash PMIs and then Fed Chair Powell speech at the Jackson Hole Symposium on Friday.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD rallied all the way to the 1.3043 level after breaking above the key resistance zone around the 1.29 handle. This is where we can expect the sellers to step in with a defined risk above the level to position for a drop back into the 1.29 handle. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 1.3140 level next.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that if we were to see a pullback, the buyers will likely lean on the upward trendline around the 1.2920 level where we can also find the 50% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor support zone around the 1.30 handle. We can expect the buyers to lean on it with a defined risk below it to position for new highs, while the sellers will want to see the price breaking lower to increase the bearish bets into the trendline. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we get the UK PMIs, the US Jobless Claims and US PMIs. On Friday we conclude the week with Fed Chair Powell speaking at the Jackson Hole Symposium.