Fundamental
Overview
The US Dollar continues to
consolidate despite the higher-than-expected inflation figures and a less
dovish Powell last week. The market’s pricing remained largely unchanged at
three rate cuts by the end of 2025.
This is generally a signal
that the market is fine with the current pricing, and we would need stronger
reasons to price out the remaining rate cuts. This could lead to some general
US Dollar weakness in the short term.
On the GBP side, this week
we got the UK CPI report with the data coming in higher than
expected. This saw the market strengthening the chances of no change at the
December BoE meeting but overall the pricing remained unchanged around 67 bps
of easing by the end of 2025.
GBPUSD
Technical Analysis – Daily Timeframe
GBPUSD Daily
On the daily chart, we can
see that GBPUSD continues to consolidate near the major upward trendline. This is where the buyers are
stepping in with a defined risk below the trendline to position for a rally
into new highs. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into new lows.
GBPUSD Technical
Analysis – 4 hour Timeframe
GBPUSD 4 hour
On the 4 hour chart, we can
see that the pair looks to be bottoming out here and we might see a pullback
into the major downward trendline. The buyers will want to see the price
breaking above the 1.27 handle to gain more conviction, while the sellers will
likely lean on that level to target the break below the upward trendline.
GBPUSD Technical
Analysis – 1 hour Timeframe
GBPUSD 1 hour
On the 1 hour chart, we can
see that the price action has been mostly rangebound since last Thursday as
that’s when the bullish momentum in the US Dollar stalled. There’s not much we
can add here as the buyers will look for a break above the 1.27 handle, while
the sellers will target a break below the trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude
the week with the UK and the US PMIs.