GBPUSD seems to be starting a new trend on its 1-hour forex chart, as the recent highs and lows can be connected using an ascending channel. Price just bounced off the channel resistance and may make its way to the support near the moving averages.
The 100 SMA is currently above the longer-term 200 SMA, confirming that the uptrend is likely to carry on. If buying pressure builds up immediately, price could move up from the current area of interest at the middle of the channel and test the top of the range once more. If a larger correction is in order, a test of support at the 1.5500 major psychological level might be seen.
Stochastic is already moving out of the oversold region, which means that bullish momentum is already in play. RSI is also indicating a potential return in buying pressure, which means that an early bounce is likely.
Last week, data from the UK came in mixed, as the economy reported a loss of 1.2K jobs in August and a mere 0.1% uptick in consumer spending. However, wage growth was stronger than expected at 2.9% in the three-month period ending in July while the unemployment rate fell back to 5.5%. Inflationary pressures weakened as expected, with the headline CPI falling flat and the core CPI dropping back to 1.0%.
As for the US, the FOMC declined to hike interest rates, leading to a sharp dollar selloff. However, the US central bank left the door open for a possible rate hike before the end of the year, which explains why dollar bulls were back in the game before the end of the week.
A few Fed officials are set to give testimonies this week, possibly providing more clues on when the Fed liftoff might take place. More arguments in favor of an October rate hike could mean more demand for the dollar, pushing GBPUSD to the bottom of the channel. On the other hand, remarks indicating that the liftoff could be delayed until next year could boost GBPUSD to the channel resistance.
Other event risks include the US existing home sales, durable goods orders data, and final GDP reading. There are no major reports lined up from the UK this week.