The GBP/USD pair at a rate of 1.27696 has gained support to reduce its weekly decline, which is the first decline in four weeks, following encouraging inflation information from the United Kingdom.
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- GBP/USD picks up bids to pare weekly loss, the first in four, after upbeat British inflation data.
The pair currently trades last at 1.27696.
The previous day high was 1.2807 while the previous day low was 1.2714. The daily 38.2% Fib levels comes at 1.2749, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2771, expected to provide resistance.
GBP/USD jumps 60 pips to pierce 1.2800 before retreating to 1.2760 as market players reassess the UK inflation data heading into Wednesday’s London open.
UK Consumer Price Index (CPI) for May rose past 8.4% market expectations to reprint the 8.7% YoY figure. That said, the Core CPI, which excludes volatile food and energy items, matches analysts’ estimations to register a stagnant increase in inflation, with 6.8% YoY numbers.
With the upbeat UK inflation numbers, as well as the previously published strong British jobs report, the Bank of England (BoE) appears all set to announce another increase in its benchmark interest rate on Thursday. Preparations for the same seem to have favored the GBP/USD buyers of late.
However, the US Dollar’s ability to grind higher for the fourth consecutive day, despite recent inaction, challenges the GBP/USD pair buyers even as the UK inflation favors BoE hawks.
That said, the US Dollar Index (DXY) stays defensive around 102.60 while keeping the four-day uptrend without marking keen interest to move toward the north. The US Dollar’s latest strength could be linked to hawkish comments from the Fed policymakers, mainly the nominees, and strong US housing data. Additionally, the geopolitical fears surrounding the US and China weigh on the sentiment and put a floor under the US Dollar’s haven demand.
Against this backdrop, S&P500 Futures pause the week-start retreat from the highest levels in 14 months, mostly inactive near 4,436 by the press time, whereas the US 10-year Treasury bond yields pare Tuesday’s losses around 3.74% at the latest.
Having witnessed the initial market reaction to the UK inflation data, the GBP/USD pair traders should keep their eyes on the risk catalysts while waiting for the bi-annual testimony of Fed Chair Jerome Powell. Above all, Thursday’s BoE Interest Rate Decision will be the key for the Cable pair traders to watch for clear directions.
The overbought RSI (14) line and the GBP/USD pair’s inability to stay beyond the key resistance line signals the extension of the previous two-day downtrend towards the previous monthly high of around 1.2680. Adding strength to the said key support is the 10-DMA.
Technical Levels: Supports and Resistances
GBPUSD currently trading at 1.2763 at the time of writing. Pair opened at 1.2765 and is trading with a change of -0.02% % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.2763 |
| 1 | Today Daily Change | -0.0002 |
| 2 | Today Daily Change % | -0.02% |
| 3 | Today daily open | 1.2765 |
The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.253, 50 SMA 1.2507, 100 SMA @ 1.2333 and 200 SMA @ 1.2057.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.2530 |
| 1 | Daily SMA50 | 1.2507 |
| 2 | Daily SMA100 | 1.2333 |
| 3 | Daily SMA200 | 1.2057 |
The previous day high was 1.2807 while the previous day low was 1.2714. The daily 38.2% Fib levels comes at 1.2749, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2771, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 1.2717, 1.2669, 1.2624
- Pivot resistance is noted at 1.281, 1.2855, 1.2903
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.2807 |
| Previous Daily Low | 1.2714 |
| Previous Weekly High | 1.2848 |
| Previous Weekly Low | 1.2487 |
| Previous Monthly High | 1.2680 |
| Previous Monthly Low | 1.2308 |
| Daily Fibonacci 38.2% | 1.2749 |
| Daily Fibonacci 61.8% | 1.2771 |
| Daily Pivot Point S1 | 1.2717 |
| Daily Pivot Point S2 | 1.2669 |
| Daily Pivot Point S3 | 1.2624 |
| Daily Pivot Point R1 | 1.2810 |
| Daily Pivot Point R2 | 1.2855 |
| Daily Pivot Point R3 | 1.2903 |
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