Fundamental Overview
The US Dollar continues to consolidate despite the higher-than-expected inflation figures and a less dovish Powell last week. The market’s pricing remained largely unchanged at three rate cuts by the end of 2025.
This is generally a signal that the market is fine with the current pricing, and we would need stronger reasons to price out the remaining rate cuts. This could lead to some general US Dollar weakness in the short term.
On the GBP side, this week we got the UK CPI report with the data coming in higher than expected. This saw the market strengthening the chances of no change at the December BoE meeting but overall the pricing remained unchanged around 67 bps of easing by the end of 2025.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD continues to consolidate near the major upward trendline. This is where the buyers are stepping in with a defined risk below the trendline to position for a rally into new highs. 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 – 4 hour Timeframe
On the 4 hour chart, we can see that the pair looks to be bottoming out here and we might see a pullback into the major downward trendline. The buyers will want to see the price breaking above the 1.27 handle to gain more conviction, while the sellers will likely lean on that level to target the break below the upward trendline.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price action has been mostly rangebound since last Thursday as that’s when the bullish momentum in the US Dollar stalled. There’s not much we can add here as the buyers will look for a break above the 1.27 handle, while the sellers will target a break below the trendline. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the UK and the US PMIs.