• The GBPUSD bias has turned bearish.

Last week, the NFP missed expectations for a second time in a row and the previous numbers were all revised lower. This was seen as a disappointment as the labour market seems to be a touch weaker than previously expected. Nevertheless, the unemployment rate fell once again and lessened the disappointment from the miss in the payrolls number. The worse part for the Fed is that the average hourly earnings beat expectations, and such high wage growth is not consistent with a sustainable return to the 2% target. It’s worth reminding though, that the Fed will see another NFP report before the September meeting, so this NFP doesn’t change much, but the data leading into the meeting can still weigh on sentiment.

On the other hand, the BoE hiked by 25 bps as expected as the UK CPI missed expectations across the board and UK employment report showed a mixed picture with both the unemployment rate and wage growth higher. The central bank seemed to be leaning more on the less hawkish side as a key line in the statement was tweaked to indicate the propensity for a “higher for longer” stance rather than a “higher-er for longer” one.

GBPUSD Technical Analysis – Daily Timeframe

GBPUSD Daily

On the daily chart, we can see that GBPUSD fell all the way down to the previous swing low level around the 1.26 handle before seeing a bounce. The bias is now bearish as the moving averages have crossed to the downside and the price has been printing lower lows and lower highs.

GBPUSD Technical Analysis – 4 hour Timeframe

GBPUSD 4 hour

On the 4 hour chart, we can see that from a risk management perspective, the sellers will have a nice spot where to short from around the 1.2847 level where we can find the confluence with the 61.8% Fibonacci retracement level and the daily 21 moving average. The buyers, on the other hand, will need to break above that resistance to invalidate the bearish setup and start targeting the highs.

GBPUSD Technical Analysis – 1 hour Timeframe

GBPUSD 1 hour

On the 1 hour chart, we can see that at the moment the price action is forming an ascending triangle. The price can break on either side of the pattern but what follows is generally an increase in momentum in the direction of the breakout. Therefore, if the price breaks below the bottom trendline, we can expect the sellers to pile in and target the 1.26 handle again.

https://www.forexlive.com/technical-analysis/gbpusd-technical-analysis-the-sellers-are-in-control-20230808/