GBPUSD Technical Analysis – The breakout is a bad omen for the buyers

USD

• The Fed left interest rates unchanged as expected with basically no change to the
  statement. The Dot Plot still showed three rate cuts for 2024 and the economic
  projections were upgraded with growth and inflation higher and the unemployment
  rate lower.
• Fed Chair Powell maintained a neutral stance as he said that it was
  premature to react to the recent inflation data given possible bumps on the way
  to their 2% target.
• The US CPI and the US PPI beat expectations for the second
  consecutive month.
• The US Jobless Claims beat expectations last week.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase.
• The US Consumer Confidence missed expectations although the labour
  market details improved.
• The market now sees basically a 50/50 chance of a
  cut in June.

GBP

• The BoE left interest rates unchanged as expected but with Haskel and
  Mann this time voting for a hold instead of a hike.
• The employment report missed expectations with an uptick
  in the unemployment rate and an easing in wage growth.
• 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 showed the Services PMI missing expectations
  slightly and the Manufacturing PMI beating.
• The market expects the first rate
  cut in June.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD has been
consolidating around the 1.26 handle as the market awaited some catalyst to
push it in either direction. The strong US ISM Manufacturing PMI yesterday did
exactly that and the pair broke down with the price extending the selloff into
the 1.2540 level. The sellers will now be looking to sell the rallies and
target the support around
the 1.25 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price broke
out of the range between the 1.2580 support and the 1.2660 resistance. We now
have a trendline that
should define the current trend. If we get a pullback, the sellers should step
in around the support turned resistance where
they will also find the confluence of the
trendline and the red 21 moving average. The
buyers, on the other hand, will want to see the price breaking above the
trendline to start targeting new highs.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the breakout and the current consolidation
around the 1.2540 level. We can see that besides the resistance at the 1.2580
level, the sellers will also find the 38.2% Fibonacci
retracement level for confluence. Alternatively, if
the price extends higher, we will have the 61.8% Fibonacci retracement level
around the trendline.

Upcoming Events

Today we have the US Job Openings and tomorrow the
US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless
Claims figures while on Friday we conclude with the US NFP report.