Sterling is sliding toward a potential support zone on the 4-hour time frame just as two high-impact data releases line up for Friday.
Will buyers step in at the confluence, or does Cable have further to fall?
Here’s what we’re seeing on the 4-hour time frame!
GBP/USD: 4-hour
GBP/USD 4-hour Forex Chart Faster with TradingView
A hot U.S. PPI report and surging crude oil pushed the odds of a Fed rate hike to around 70% for the September 15 and 16 meeting, keeping the dollar broadly supported this week. Friday’s U.S. CPI report is the final major inflation reading before the Fed meets, and another hot print could extend the Greenback’s run.
The pound could find its own direction from Friday morning’s U.K. July GDP report. A stronger reading may give buyers a reason to step in around nearby support, while a disappointment could keep sterling under pressure ahead of the U.S. data.
GBP/USD has pulled back from its August high near 1.3700 and is moving lower within its ascending channel on the 4-hour chart. After breaking below the 38.2% Fibonacci retracement, the pair is approaching a stronger support zone where the S1 Pivot Point at 1.3468, the 200 SMA, and the 50% Fibonacci retracement all meet.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Bullish reversal candles around this area could signal that buyers are stepping back in. A bounce may bring the R1 area near 1.3560 into view, followed by the previous swing high around 1.3675 and the channel ceiling between 1.3700 and 1.3750.
However, a clear close below the 200 SMA and channel support would weaken the bullish setup. GBP/USD could then fall toward the S2 Pivot Point near 1.3435 and the 1.3400 psychological level.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
GBP/USD is approaching a zone where the S1 Pivot Point, the 200 SMA, and the 50% Fibonacci retracement all converge. If that combination sounds significant but you’re not sure why, it comes down to confluence. Premium members can read our lesson:
📖 Confluence: Stacking the Odds in Your Favor
Reading this helps you understand how multiple technical factors at the same level strengthen a setup, why a zone with several signals behind it carries more weight than any single indicator, and how to assess whether a support area is actually worth trading.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just where price is, but why certain zones on the chart carry more weight than others.
