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 US CPI beat
  expectations for the second consecutive month with the disinflationary trend
  reversing.
• The US PPI beat
  expectations across the board by a big margin.
• The US Initial Claims beat
  expectations while Continuing Claims missed. Overall, the data remains steady.
• 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 Retail Sales missed
  expectations across the board by a big margin.
• The market now expects the first rate cut in June.

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 employment report beat expectations across the board
  with a positive revision to the December’s negative payroll figure.
• 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 Manufacturing sector improving but
  remaining in contraction while the Services sector continues to expand.
• The latest UK Retail Sales beat expectations across the board
  by a big margin.
• The market expects the first rate
  cut in June.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD continues
to range as the monetary policy divergence between the Fed and the BoE remains
slim. Nevertheless, the US economic outperformance should keep the USD stronger
versus its peers. We can see that the moving averages are now
pointing downwards, which is generally a sign of a change in trend. The pair
will need to break the support zone though to confirm the new bearish trend.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
action has been very messy lately with no clear support or
resistance level. Nonetheless, the sellers might want to lean on the recent
resistance at 1.2612 where we can also find the black trendline for confluence. The
buyers, on the other hand, will want to see the price breaking higher to start
targeting the high at 1.2685.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have an important zone around the 1.2580 level where the price reacted from
several times. We can expect the buyers to step in again around this zone with
a defined risk below it to position for a breakout above the trendline. The
sellers, on the other hand, will want to see the price breaking lower to start
targeting the key 1.25 support and eventually a break below it.

Upcoming Events

This week is basically empty on the data front with just
the release of the FOMC Meeting Minutes tomorrow followed by the UK and the US
PMIs, and the US Jobless Claims on Thursday.

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