GBPUSD Technical Analysis – The bullish momentum waned

Fundamental Overview

The USD finally got a bit of a boost after the FOMC decision despite the central bank maintaining the status quo. In fact, the Fed kept rates steady, reduced the QT pace, revised growth lower and inflation higher, and kept the dot plot mostly unchanged.

Fed Chair Powell acknowledged the current uncertainty around Trump’s policies and the inflation outlook but confirmed that the economy remains healthy, and the Fed is in a good position to wait for more clarity.

The data remains in focus. The next key event is scheduled for Monday when we get the US Flash PMIs which coupled with the UMich inflation expectations triggered the growth scare last month.

On the GBP side, the BoE kept interest rates steady yesterday as expected with an 8-1 vote split compared to 7-2 expected. Overall, it was a less dovish than expected decision and the market is now seeing just 44 bps of easing by year end versus 53 bps before the decision. The data continues to put the BoE in an uncomfortable position given the high wage growth and sticky inflation.

GBPUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that GBPUSD continues to lose momentum as the pair can’t break above the 1.30 handle. From a risk management perspective, the buyers will have a better risk to reward setup around the support zone around the 1.28 handle where they will also have the upward trendline for confluence. The sellers, on the other hand, will look for a break below the support to increase the bearish bets into the major trendline around the 1.26 handle.

GBPUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price broke below the bottom trendline of the rising channel. This might give the sellers more confidence to pile in for a deeper pullback into the 1.28 handle. The buyers, on the other hand, will want to see the price rising back into the channel to start targeting new highs.

GBPUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a downward trendline defining the bearish momentum on this timeframe. The sellers will likely lean on the trendline to keep pushing into new lows, while the buyers will look for a break higher to pile in for a rally into the 1.3050 level next. The red lines define the average daily range for today.