USD

• The Fed left interest rates unchanged as
  expected at the last meeting while dropping the tightening bias in the
  statement but adding a slight pushback against a March rate cut.
• 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 Jobless Claims beat
  expectations with the data remaining steady.
• The latest US PMIs
  increased further from the prior month with the Manufacturing PMI beating
  expectations and the Services PMI missing.
• 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 improved from the prior month with the
  Services PMI beating expectations and the Manufacturing PMI missing.
• 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 trade inside the range with a choppy price action. This is one of the worst
market environments as traders can get whipsawed on either direction. There’s
not much to glean from this chart, so we need to zoom in to see some more
details.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a
strong resistance at the
1.2685 level which is the high of the hot US CPI release. We can also see that
we have an upward trendline defining
the current uptrend where the buyers have been leaning onto to position for
higher highs. This is exactly where we can expect them to step in again as they
will also find the red 21 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and position for a drop into the 1.25 support.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the multiple failed breakouts of the
1.2685 resistance. What happens here will likely decide where the pair will go
in the next few days as a successful break to the upside should lead to a rally
into the 1.28 handle, while a break to the downside will likely trigger a
selloff into the 1.25 level.

Upcoming Events

This week we have some important economic data on the
agenda. We begin today with the release of the US Consumer Confidence report.
On Thursday, we will see the US PCE and the latest US Jobless Claims figures.
Finally, on Friday, we conclude the week with the US ISM Manufacturing PMI.

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