USD
- The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
- The US PCE came in line with expectations.
- The US ADP and the US Job Openings missed expectations, followed by weaker than expected US Jobless Claims.
- The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
- The US Consumer Confidence missed expectations across the board.
- The market expects the first rate cut in June.
GBP
- The BoE left interest rates unchanged as expected at the last meeting removing the tightening bias but reaffirming that they will keep rates high for sufficiently long to return to the 2% target.
- The employment report beat expectations across the board with a positive revision to the December’s negative payroll figure.
- 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 improved from the prior month with the Services PMI beating expectations and the Manufacturing PMI missing.
- The market expects the first rate cut in June.
GBPUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that GBPUSD surged all the way back to the top of the range around the 1.28 handle. This is where we can expect the sellers to step in with a defined risk above the resistance to position for a drop back into the bottom of the range. The buyers, on the other hand, will want to see the price breaking higher to start targeting the 1.30 handle.
GBPUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better risk to reward setup around the previous resistance turned support at the 1.27 handle where they will also find the 61.8% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking below the support to target new lows.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another good support around the 1.2765 level where we can find the confluence of the trendline and the Fibonacci retracement levels. This is where we can expect the buyers to step in with a defined risk below the trendline to position for a break above the resistance with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into the 1.27 support.
Upcoming Events
Today we conclude the week with the US NFP report.
