GBP/USD outlook: Cable bounces after US CPI data as markets digest results
|GBP/USD
Cable fell below 1.23 handle after US CPI data came above expectations in April, but dip stayed above new 2022 low (1.2260) posted on Monday and subsequent bounce pushed the price to the mid-point of the near-term range which extends into fourth straight day.
Persisting high US inflation adds to expectations that the Fed would step up with policy tightening, bringing the possibility of 0.75% rate hike back on the table that would offer fresh support to the US currency and maintain pressure on sterling.
However, markets need to digest the data to give clearer near-term direction picture, as triple Doji on daily chart and indicators emerging from oversold territory signal that bears may take a breather for correction, attempt to counter strong bearish signal from rise in closely watched core CPI (Apr m/m 0.6% vs 0.4% f/c and Mar 0.3%) that works in favor of Fed’s more aggressive approach.
Break above near-term range top (1.2405) and daily Tenkan-sen (1.2450) would ease bearish pressure, but further rise above minimum 1.25 handle would boost initial positive signal. Failure to clear daily Tenkan-sen would keep near-term bias with bears and signal extended consolidation before bears resume.
Res: 1.2411; 1.2449; 1.2469; 1.2548.
Sup: 1.2328; 1.2300; 1.2260; 1.2200.
Interested in GBP/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.