Fundamental
Overview
The USD got a boost last
week from the strong US PMIs which lifted Treasury yields and put in
question the rate cut in September. Once the market digested the report and saw
that there was more good news on the growth side than bad news on inflation,
the USD strength faded fast.
The GBP, on the other hand,
has been supported by a slightly more hawkish repricing in interest rates
expectations following the hot UK
CPI report last week.
GBPUSD
Technical Analysis – Daily Timeframe
GBPUSD Daily
On the daily chart, we can
see that GBPUSD has been bouncing around the 1.27 handle recently with many
economic data leading to an erratic price action. The bullish momentum seems to
be intact and the next target for the buyers should be the 1.28 handle. The
sellers will need the price to fall below the trendline
to reverse the technical uptrend.
GBPUSD Technical
Analysis – 4 hour Timeframe
GBPUSD 4 hour
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 trendline where they will also find the confluence
of the previous swing high and the 38.2% Fibonacci
retracement level.
At the moment, such a pullback
looks unlikely, so we might first reach the 1.28 handle before seeing a bigger
correction into the trendline as we have many important economic releases next
week.
GBPUSD Technical
Analysis – 1 hour Timeframe
GBPUSD 1 hour
On the 1 hour chart, we can
see that we have a notable resistance
at the 1.2750 level where the price got rejected from several times. A break
above it should see the buyers piling in with more conviction for a rally into
the 1.28 handle. The sellers, on the other hand, might want to step in around
these levels to position for a drop into the trendline around the 1.2640 level.
The red lines show the average
daily range of the pair.
Upcoming
Catalysts
Tomorrow we get the US Consumer Confidence report where the focus will likely be
on the labour market details. On Thursday, we will see the latest US Jobless
Claims figures. Finally on Friday, we conclude the week with the US PCE report.