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Fundamental
Overview
The USD continues to
consolidate around the highs except against the commodity currencies where it’s
been having the upper hand. The US inflation data last week was once again a
disappointment although the data that feeds into the Core PCE was overall benign
as forecasters expect a 0.13% M/M increase.
Nonetheless, the Treasury yields continue to climb and are now back around the
post-US election highs. There’s some understandable uneasiness in the bond
market given the hot US data and the Fed continuing to cut into an accelerating
economy.
On the GBP side, the UK
employment report today came in better than expected, especially on the
wage growth side which strengthened the probabilities for the BoE to remain on
hold this week and decreased the chances for three rate cuts in 2025.
GBPUSD
Technical Analysis – Daily Timeframe
GBPUSD Daily
On the daily chart, we can
see that GBPUSD failed to extend the rally after breaking above the downward trendline and sold off all the way back to
the major upward trendline. This is where the buyers are stepping in to
position for a rally into new highs, while the sellers will look for a break
below the major trendline to target a drop into the 1.23 handle next.
GBPUSD Technical
Analysis – 4 hour Timeframe
GBPUSD 4 hour
On the 4 hour chart, we can
see that we have a strong zone around the 1.2715 level where the price reacted
from several times in the past weeks. The sellers will likely lean on it to
position for a break below the major trendline, while the buyers will look for
a break higher to target new highs.
GBPUSD Technical
Analysis – 1 hour Timeframe
GBPUSD 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum
on this timeframe. The buyers will likely keep on leaning on it to position for
the break above the 1.2715 zone, while the sellers will look for a break lower
to increase the bearish bets into the major trendline. The red lines define the
average daily range for today.
Upcoming
Catalysts
Today, we get the US Retail Sales data. Tomorrow, we have the UK CPI report
and the FOMC Policy Decision. On Thursday, we have the BoE Policy Decision and
the US Jobless Claims figures. On Friday, we conclude the week with the UK
Retail Sales and the US PCE data.