The USD saw a rise in value last Friday after a strong US NFP report. This caused the market to adjust its expectations for rate cuts, aligning more closely with the Fed’s projections. Moving forward, the focus will be on economic data, with the upcoming US CPI report being a key event to watch. A strong report could lead to further downside, while a significant miss might push the market towards more aggressive rate cuts.
On the GBP side, there is an expectation for the Bank of England to deliver 37 basis points of easing by the end of the year, with a 25 basis point cut in November being priced at an 85% probability. Next week, important data will be released from the UK, including the labor market and CPI reports.
Looking at the technical analysis for GBPUSD, on the daily timeframe, the currency pair is nearing the key 1.30 level. Buyers may step in around this level, with a defined risk below, in anticipation of a rally to new highs. Sellers, on the other hand, will be looking for a break below to increase bearish bets towards the major trendline around 1.29.
On the 4-hour chart, there is a consolidation of bearish momentum ahead of the US CPI report. A minor support level is seen around 1.3058, with sellers aiming for a break below to target 1.30, while buyers may accumulate around this level for a pullback towards 1.3175.
The 1-hour chart shows the price trading within a tight range between 1.3058 support and 1.3113 resistance. Sellers will be watching for a downside break, while buyers will be eyeing an upside break for a potential rally towards 1.3175.
In terms of upcoming catalysts, today’s FOMC Meeting Minutes will be followed by the US CPI report and Jobless Claims figures tomorrow. Friday will see the release of the UK GDP, US PPI, and University of Michigan Consumer Sentiment report. These events will likely have an impact on the GBPUSD trading dynamics in the coming days.
