GBPUSD Technical Analysis - We are at a key support

USDThe Fed left interest rates unchanged as expected at the last meeting with a shift in the statement that indicated the end of the tightening cycle. The Summary of Economic Projections showed a downward revision to Growth and Core PCE in 2024 while the Unemployment Rate was left unchanged. Moreover, the Dot Plot was revised to show three rate cuts in 2024 compared to just two in the last projection. Fed Chair Powell didn't push back against the strong dovish pricing and even said that they are focused on not making the mistake of holding rates high for too long, which implies a rate cut coming soon.The US CPI last week came in line with expectations with the disinflationary progress continuing steady. This was also confirmed by the US PPI the day after where the data missed estimates. The labour market has been showing signs of weakening lately but we got some strong releases recently with the US Jobless Claims and the NFP coming in strongly. The US Retail Sales last week beat expectations across the board as consumer spending continues to hold. The US Consumer Confidence report yesterday beat expectations across the board.The latest ISM Manufacturing PMI missed expectations falling further into contraction, while the ISM Services PMI beat forecasts holding on in expansion. The market expects the Fed to start cutting rates in Q1 2024.GBPThe BoE left interest rates unchanged as expected at the last meeting with no dovish language as they reaffirmed that they will keep rates high for sufficiently long to return to the 2% target.Governor Bailey pushed back against rate cuts expectations as he said that they cannot say if interest rates have peaked. The latest employment report missed forecasts with wage growth coming in much lower than expected and job losses in November.The UK CPI today missed expectations across the board, which is another welcome development for the BoE.The UK PMIs showed the Manufacturing sector falling further into contraction while the Services sector continues to expand. The latest UK Retail Sales missed expectations across the board by a big margin as consumer spending remains weak.The market expects the BoE to start cutting rates in Q2 2024GBPUSD Technical Analysis – Daily TimeframeOn the daily chart, we can see that GBPUSD recently probed above the 1.2743 resistance but got smacked back down soon after. The divergence with the MACD was also a warning sign of a possible pullback as it often signals pullbacks or reversals. In this case, the price is pulling back to the key trendline where we can find the confluence with the 1.2593 support and the 50% Fibonacci retracement level of the entire fall since July. GBPUSD Technical Analysis – 4 hour TimeframeOn the 4 hour chart, we can see more closely the bullish setup around the support zone. This is where the buyers are likely to step 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 below the trendline to invalidate the bullish setup and position for a drop into the 1.2374 level. GBPUSD Technical Analysis – 1 hour TimeframeOn the 1 hour chart, we can see more closely the current price action with the pair trading into the support zone. If the price breaks above the minor downward trendline, the buyers should increase their bullish bets into new highs. The sellers, on the other hand, might want to lean on the minor trendline to position for a downside breakout with a better risk to reward setup. Upcoming EventsToday we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the UK Retail Sales and the US PCE data. This article was written by FL Contributors at www.forexlive.com.