January 24, 2025 at 11:26AM
Fundamental
Overview
The USD continues to lose
ground as the tariffs fears ease. In fact, tonight Trump said that he would rather not use tariffs on
China which
triggered more weakness in the greenback.
The tariffs risk has been
the only thing keeping a bid under the US Dollar after the US inflation data,
so when that risk eases, the greenback weakens.
On the GBP side, the UK PMIs today jumped to a 3-month high although
S&P Global noted that the economy faces a stagflationary scenario amid jobs
shedding and increased inflationary pressures.
Despite that, the market
continues to expect a rate cut at the upcoming meeting and a total of 67 bps of
easing by year end.
GBPUSD
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that GBPUSD is rejecting the major trendline as the sellers are stepping in with
a defined risk above the trendline to position for a drop into the 1.2040
level. The buyers will want to see the price breaking higher to gain more
conviction and increase the bullish bets into the 1.28 handle next.
GBPUSD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we now have an upward trendline defining the current bullish momentum.
If the price were to pull back into it, we can expect the buyers to lean on the
trendline to position for a break above the major trendline. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into new lows.
GBPUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have another minor upward trendline defining the bullish momentum
on this timeframe. The buyers will keep on leaning on it to push into new
highs, while the sellers will look for a break lower to increase the bearish
bets into the next trendline. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we conclude the week with the Flash US PMIs.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
