US:

• The Fed left interest rates unchanged as
  expected.
• The macroeconomic projections were revised higher
  as the economy showed much stronger resilience than expected and the Dot Plot
  showed that the majority of members still expects another rate hike by the end
  of the year with less rate cuts in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully as
  they are trying to find the optimal level of rates. Powell also added that the
  soft landing is not the base case at the moment, although they are aiming for
  it.
• The latest US CPI came
  in line with expectations with the Core measure continuing to show
  disinflation.
• The labour market displayed
  signs of softening although it remains fairly solid as seen also yesterday with
  another beat in Jobless Claims.
• The US Consumer Confidence this
  week missed expectations although the jobs details were positive.
• The market doesn’t expect the Fed to hike again at
  the moment.

UK:

• The BoE kept interest rates unchanged.
• The central bank is leaning more towards
  keeping interest rates “higher for longer” but it kept a door open for further
  tightening if inflationary pressures were to be more persistent.
• Key economic data like the latest employment report showed a very high wage growth
  despite the rising unemployment rate, but the latest UK CPI missed expectations across the board.
• The latest UK PMIs showed further contraction, especially in the
  Services sector.
• The market doesn’t expect the BoE to
  hike anymore.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the GBPUSD pair
has been melting with almost no pullback since the 1.27 area. The pair got
really overstretched on the downside as depicted by the distance from the blue
8 moving average and this
is generally when we can see some consolidation or a pullback into the moving
average before the next move. The sellers are likely to pile in around the 1.23
resistance where we
can also find confluence with the
38.2% Fibonacci retracement level
and the red 21 moving average. The buyers will need the price to break above
the downward trendline to
switch the overall trend.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have
another selling zone around the minor trendline and the 38.2% Fibonacci
retracement level. We are likely to see GBPUSD falling again already from this
spot if the bearish momentum remains strong. The buyers, on the other hand, will
want to pile in at every upside breakout to target the major trendline.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor divergence with
the MACD right
when the price is approaching the selling zone. This is generally a sign of
weakening momentum often followed by pullbacks or reversals. In this case, we
are likely to see the sellers piling in around the resistance with a defined
risk above the trendline and increase the pressure if the price breaks also
below the minor upward trendline. The buyers, on the other hand, should
increase their longs if the price breaks above the trendline.

Upcoming Events

Today the only notable release will be the US PCE
report. The data is unlikely to change anything for the market unless we get
some big surprises.

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