GBP/USD jumps 30 pips as UK CPI rises to highest since March 2012
|- GBP/USD rises to fresh session high post-CPI.
- Headline CPI prints at highest since March 2012.
- Pair back above 38.2% Fib R
GBP/USD jumped 30 pips to a fresh session high of 1.3380 after the UK Office for National Statistics data reported November CPI at 3.1 percent y/y; the highest level since March 2012. Markets were expecting CPI to print at 3 percent.
Meanwhile, the core CPI came in at 2.7 percent y/y as expected.
As of writing, the spot is trading at 1.3373. The Pound may remain well bid as the 10-year US-UK yield spread has narrowed slightly in the GBP-positive manner. The spread now stands at 116.4 bps vs. pre-data level of 117.1 bps. The spread had widened to 118 bps yesterday; its highest level since Aug. 15.
Still, the gains could be capped around the 5-day MA of 1.3391 as Brexit uncertainty could force the BoE to go slow with policy tightening. Further, the USD may find takers ahead of tomorrow's FOMC rate decision.
GBP/USD Technical Outlook
Haresh Menghani, Editor and Analyst at FXStreet writes, "technically, the pair might now be eyeing for a bullish break through a short-term descending trend-line resistance near the 1.3535 region, above which the upward trajectory is likely to accelerate towards the 1.3600 handle en-route post-Brexit swing high resistance near the 1.3655-60 region, touched in September.
Alternatively, any profit-taking might now find immediate support near the 1.3480 region, which if broken could drag the pair back towards 1.3430-25 area en-route the 1.3385 strong support. A convincing break below the mentioned support levels might now negate any near-term bullish bias and turn the pair vulnerable to head back towards retesting the 1.3320 support area ahead of the 1.3300 handle."
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.