Over the past 24 to 48 hours, the GBP/USD pair experienced notable volatility, with the closing price slightly retreating from yesterday’s 1.35197 to near 1.347, reflecting a tug of war between bullish and bearish forces. Market movements during this period were mainly influenced by UK economic data and broader macro risks, particularly soft employment numbers and fluctuations in consumer price indices, which drove price volatility.

Latest market news highlights that the UK unemployment rate rose to a five-year high in December, alongside slowing wage growth, strengthening expectations for further Bank of England rate cuts. This weighed on the British pound, prompting GBP/USD to drop from its highs. Furthermore, despite the headline consumer inflation cooling, persistent service sector inflation underscores ongoing uncertainties in the UK economic recovery.

From an average investor’s perspective, the recent GBP/USD price action reflects growing concerns and anticipation regarding a soft landing for the UK economy. When economic data point toward weakness and job market instability, investors typically adjust their forex positions, anticipating a more accommodative central bank policy. Consequently, the pound may face downside pressure with heightened short-term volatility.

Meanwhile, global geopolitical tensions, such as US-Iran strains, have increased demand for safe-haven assets like the US dollar and gold. This flight to safety has further contributed to GBP/USD fluctuations, making it challenging for the pair to hold steady.

Daily Chart

The daily chart reveals a strong uptrend in GBPUSD as prices floated above the 200-day moving average of 1.34168, peaking recently at 1.35332. However, the pair has started to retrace and break a critical trendline, hinting at weakening momentum. The MACD shows a bearish crossover with the fast line crossing below the slow line, indicating increasing selling pressure. Bollinger Bands are contracting, signaling potential for increased volatility. Overall, the chart suggests a shift in technical structure that traders should monitor carefully for further downside risk.

1H Chart

The hourly chart covering the past 3-5 days shows GBPUSD in a short-term downtrend, with moving averages flattening and then heading downward. Bollinger Bands are expanding downward as bearish momentum rises. The MACD has formed a clear bearish crossover, underscoring weakening short-term momentum. Attempts to rally near 1.3530 have been met by resistance, creating a descending wedge or flag pattern that signals further possible downside. Key near-term support around 1.3477 should be closely watched by traders.

Technical Trend:  Combining technical and fundamental factors, GBPUSD is in a cautiously bearish phase. Short-term momentum is waning, and market sentiment is tilted towards downside risk. Traders should exercise prudence and avoid chasing shorts indiscriminately.

Technically, GBPUSD’s break below a critical ascending trendline signals a bearish flag pattern with a potential downside target of around 470 pips. The daily MACD bearish crossover and expanding Bollinger Bands confirm increasing selling pressure. The hourly MACD death cross and the inability to surpass the 1.3530 resistance reinforce the short-term bearish outlook. Volume hasn’t surged yet, but momentum clearly favors sellers. Traders should watch if the 1.3470 support level holds; breakdown here may open the door to a more extended correction.

Today’s economic calendar includes Germany’s February Ifo Business Climate and Poland’s retail sales data, but none are expected to directly impact GBPUSD significantly. Key US data such as durable goods orders and Federal Reserve speeches slated for late evening (Hong Kong time) may influence USD volatility but won’t affect the Asian session. Overall, no major economic events today will directly drive GBPUSD price action, though market participants should remain alert to potential volatility from US events later in the day.

Resistance & Support

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