Market on Edge as GBPUSD Consolidates

While the GBPUSD currency pair has experienced an upward trend since late last year, recent times have seen a shift towards consolidation. The trading range for this pair has tightened, revealing a fascinating technical pattern during a crucial week of economic data releases.  

The UK economy’s robust performance has led to a reconsideration of expectations for rate cuts by the BoE. Simultaneously, the resilience of the US economy has prompted a re-evaluation of expectations for rate cuts in March. However, the pivotal event of the week hinges on the PCE Price Index, an inflation measure that has the potential to reshape market sentiment regarding the trajectory of US monetary policy for the rest of the year. 


The uptrend was broken down on the daily chart, but the pair failed to gain enough bearish traction to enforce a downtrend. Instead, the price action consolidated, forming a symmetrical triangle which could trigger a breakout in either direction in the coming days. 

The 25-SMA (green line) currently offers resistance at 1.2706. While this resistance holds, the dynamic support of the triangle could be vulnerable to a breakdown, which could push the pair below the 50-SMA (blue line) toward 1.2544. The 100-SMA (orange line) could then come under the spotlight near the Fibonacci midpoint and golden ratio, which are established at 1.2432 and 1.2339, respectively.  

However, if the 25-SMA gets breached, it could signal that the bulls are regaining the upper hand. A breakout from the dynamic resistance could lead to convergence with 1.2849. At this level, the price could either pivot to retest the breakout level or continue its ascent toward higher resistance at 1.2947.  


The GBPUSD currency pair is in a consolidation phase in a symmetrical triangle formation ahead of the US PCE data later this week. This data release holds the potential to trigger a breakout in either direction, potentially enforcing a new directional trend for the currency pair.  

Sources: Koyfin, Tradingview 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

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