#GBPUSD @ 1.24249 traders await UK inflation data in CPI. (Pivot Orderbook analysis)

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• GBP/USD traders await UK inflation data in CPI.
• The markets are pricing in a 25bp hike from the BoE at May 11 meeting.

The pair currently trades last at 1.24249.

The previous day high was 1.245 while the previous day low was 1.2368. The daily 38.2% Fib levels comes at 1.2418, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2399, expected to provide support.

GBP/USD was last trading at 1.2425, flat on the day, and had traveled from a low of 1.2366 to a high of 1.2449 overnight as the markets digest UK data and look to the next set of ammunition in today´s inflation report.

On Tuesday, there was an unexpected rise in the Unemployment Rate in the three months to February. This had been expected to remain steady at 3.7% and instead rose a tick to 3.8%. However, average hourly earnings came in at 5.9% YoY vs. the 5.1% expected and a revised 5.9% (was 5.7%) previously. The data leaves the focus on a rate hike from the Bank of England at next month´s meeting.

In this regard, analysts at Rabobank noted that net short GBP speculators’ positions have dropped to their lowest level since March 2022 reflecting an improvement in sentiment linked to a slew of less bad UK economic data. ´´The May BoE policy meeting is in view. The market is fully priced for another 25-bps rate hike and sees risk of additional tightening in the coming months.´´

Analysts at Brown Brothers Harriman explained that the WIRP suggests around 90% odds of a 25 bp hike, with another 25 bp hike priced in for August 3. ´´The odds of one last hike in September or November top out near 20%. As a result, the peak policy rate is seen near 4.75% vs. between 4.50-4.75% at the start of last week.´´

The headline Consumer Price Index is expected at 9.8% YoY vs. 10.4% in February, while the core is expected at 6.0% YoY vs. 62% in February, and CPIH is expected at 8.7% YoY vs. 9.2% in February.

Analysts at TD Securities explained that ´´inflation is proving stickier than the MPC expected in its February projections.´´ The analysts note that ´´both core goods and services prices are proving persistent. March’s inflation data is likely to be boosted by rail fares and food.´´ The analysts argue that ´´the risks to our forecast lie around the latter: we assume that despite some improvement in supplies, prices remained moderately high through March, as seen elsewhere in Europe in other March inflation data.´´

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.243 at the time of writing. Pair opened at 1.2425 and is trading with a change of 0.04 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2386, 50 SMA 1.2188, 100 SMA @ 1.2191 and 200 SMA @ 1.1918.

The previous day high was 1.245 while the previous day low was 1.2368. The daily 38.2% Fib levels comes at 1.2418, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2399, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.2378, 1.2332, 1.2296
• Pivot resistance is noted at 1.246, 1.2496, 1.2542

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