Key Moments
- The US Dollar is rebounding from its late-January selloff, supported by firmer US economic data.
- GBP gained after UK Flash PMIs beat forecasts, while markets expect the BoE to hold rates with a 6–3 vote split.
- GBPUSD briefly topped 1.3790 before pulling back, with focus now on support near the 1.3500 trendline.
Fundamental Overview
US Dollar Outlook
The US Dollar has recovered after a sharp decline in late January. Stronger US data has helped stabilize sentiment, with the latest ISM Manufacturing PMI pointing to firmer economic momentum.
As a result, expectations for aggressive Federal Reserve easing have eased slightly. If upcoming data continues to surprise on the upside, the Dollar could extend its recovery.
Later today, traders will focus on the US ADP employment report and the ISM Services PMI. Strong results could push rate expectations in a more hawkish direction and lift the Dollar further. However, weaker data may trigger short-term pressure without changing the broader outlook.
Meanwhile, attention remains on the delayed Nonfarm Payrolls report, postponed by the partial government shutdown. It may be released next week alongside the US CPI report. Until then, traders are likely to stay cautious despite the Dollar’s improving bias.
British Pound Fundamentals
The British Pound strengthened after UK Flash PMIs exceeded expectations. This data prompted a modest hawkish repricing and supported GBP demand.
In contrast, recent UK employment and inflation figures met forecasts and failed to shift the policy outlook. Therefore, the broader narrative remains intact.
The Bank of England is widely expected to keep rates unchanged at its upcoming meeting. Markets anticipate a 6–3 vote split. Policymakers are also likely to retain their data-dependent guidance.
Still, investors will closely watch the updated monetary policy report. Any downgrade to inflation forecasts or estimates of the neutral rate could be read as a dovish signal.
GBPUSD Technical Picture
Daily Timeframe
On the daily chart, GBPUSD briefly broke above the cycle high near 1.3790. However, the move quickly failed, drawing sellers into the market.
As a result, bearish pressure has shifted focus toward the rising trendline near 1.3500. If price reaches that zone, buyers may step in to defend the broader uptrend.
4-Hour Timeframe
On the 4-hour chart, a minor descending counter-trendline continues to guide the pullback. Buyers are leaning against this structure to manage risk and regain upside momentum.
Meanwhile, sellers are watching for a clean break below this line. Such a move could open the door for a deeper decline toward daily support.
1-Hour Timeframe
The 1-hour chart reflects a similar setup. Short-term buyers are looking for rebounds near trendline support, while sellers want a confirmed breakdown.
The red lines on this timeframe mark the average daily range. These levels define the expected intraday volatility for the session.
Key GBPUSD Technical Levels
| Timeframe | Level / Feature | Bias / Focus |
|---|---|---|
| Daily | Cycle high near 1.3790 | Failed breakout; key resistance zone |
| Daily | Major trendline near 1.3500 | Primary support and potential buy area |
| 4-hour | Minor counter-trendline | Defines pullback structure |
| 1-hour | Average daily range | Frames intraday volatility |
Upcoming Macro Catalysts
Several events could drive volatility in GBPUSD over the coming sessions:
- Today: US ADP Employment Change, ISM Services PMI
- Tomorrow: Bank of England rate decision, US Jobless Claims
- Friday: University of Michigan Consumer Sentiment
In addition, the delayed US Nonfarm Payrolls report and next week’s US CPI release will play a central role in shaping rate expectations and directional bias for both GBP and USD.
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