USD

• The Fed left interest rates unchanged as
  expected while dropping the tightening bias in the statement but adding a
  slight pushback against a March rate
  cut.
• Fed Chair Powell stressed
  that they want to see more evidence of inflation falling back to target and
  that a rate cut in March is not their base case.
• The latest US GDP beat
  expectations by a big margin.
• The US PCE came
  mostly in line with expectations with the Core 3-month and 6-month annualised
  rates falling below the Fed’s 2% target.
• The US NFP report
  beat expectations across the board by a big margin.
• The ISM Manufacturing
  PMI
  surprised to the upside with the new orders index, which is considered a
  leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
  expectations across the board with the employment sub-index erasing the prior
  drop and prices paid jumping above 60.
• The US Consumer
  Confidence report came in line with expectations but
  the labour market details improved considerably.
• The market now expects the first rate cut in May.

GBP

• The BoE left interest rates unchanged as expected at the last meeting
  removing the tightening bias but reaffirming that they will keep rates high for
  sufficiently long to return to the 2% target.
• The latest employment report showed job losses in December and
  lower than expected wage growth.
• The UK CPI beat expectations across the board, which gives
  the BoE a reason to remain patient.
• The latest UK PMIs showed the Manufacturing sector improving but
  remaining in contraction while the Services sector continues to expand.
• The latest UK Retail Sales missed expectations across the
  board by a big margin as consumer spending remains weak.
• The market expects the BoE to start
  cutting rates in June.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD broke
out of the range following the strong US NFP report and pulled back to retest
the support now turned resistance around
the 1.2612 level. The price was overstretched after the quick selloff 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. Here we got a pullback into the moving
average, and we can now expect the sellers to step in with a defined risk above
it to target a break below the 1.25 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we got a
reaction yesterday as the price sold off into the 1.2570 level but eventually
rebounded back into the resistance zone.
The buyers will want to see the price breaking above the recent high at 1.2642
to invalidate the bearish setup and position for a rally back into the top of
the range around the 1.28 handle.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the pair now consolidating right around
the resistance zone. If the price were to break below the minor support at
1.2605, we can expect the sellers to pile in to increase the bearish bets into
the 1.25 support. Conversely, a break above the 1.2642 level should lead to a
rally into new highs with the buyers increasing the bullish bets into the 1.28
handle.

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