GBPUSD Technical Analysis – Key resistance in sight

US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged at the last meeting.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• Inflation measures
  since then showed further disinflation.
• The labour market
  displayed signs of softening although it remains fairly solid.
• Overall, the economic data started to surprise to
  the downside lately.
• This week the ISM Services PMI and Jobless Claims
  surprised to the upside.
• The Fed members are leaning more towards a pause in
  September rather than another rate hike.
• ·The market doesn’t expect the Fed to hike at the
  September meeting, but there’s now a 50/50 chance of a hike in November.

UK:

• The BoE hiked by 25 bps as expected at the last meeting.
• The central bank seems to be leaning
  more on the less hawkish side as a key line in the statement was tweaked to
  indicate the propensity for a “higher for longer” stance rather than keeping
  with additional rate hikes.
• Recent key economic data like the
  latest employment report showed even more wage growth
  despite the unemployment rate ticking higher again, and the UK CPI beat expectations pointing to stagflation.
• The UK PMIs recently missed expectations across the board
  with the Services sector plunging into contraction.
• The market expects the BoE to hike
  by 25 bps at the upcoming meeting.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD
eventually broke out of the key support around
the 1.2593 level and extended the selloff into the 1.2450 level. This breakout
opened the door for a fall into the 1.2310 level, although we might see first a
pullback given that the price is a bit overstretched as depicted by the
distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the support
zone has turned into resistance now and we have also the confluence with the
Fibonacci retracement levels,
the trendline and the
daily red 21 moving average. This is where the sellers are likely to pile in again
with a defined risk above the trendline to target the 1.2310 level. The buyers,
on the other hand, will need the price to break above the trendline to
invalidate the bearish setup and start targeting new higher highs.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that at
the moment the price is testing a minor trendline where we have also the
confluence of the previous swing high level and the 38.2% Fibonacci retracement
level. More aggressive sellers may want to enter already here with a defined
risk above the level to target the 1.2310 support. The buyers, on the other
hand, will want to see the price breaking higher to pile in and extend the
correction into the 1.26 handle.