GBP/USD - Rejected again at 1-hour 50-MA, is the pair overpriced?
|GBP/USD fails again to take out the 1-hour 50-MA, marking the third failure at the moving average in the last twelve hours.
The currency pair looks overpriced if we take into account the fact that the US-UK 10-year bond yield spread has widened from 1.112 to 1.207 over the last one week.
The comparison of the macro data releases this week also suggests the British Pound could take a hit. The UK CPI printed at the highest level since June, but fell just short of the expectation of 1.9%. Meanwhile, UK wage growth slumped to its lowest for 2 years despite record employment.
Across the pond, the US CPI printed at the highest in nearly four years, while the retail sales topped expectations with a 0.4 % gain. Moreover, what this means is the US-UK yield spread could widen further.
Upbeat US initial jobless claims figure and housing data could strengthen the offered tone around the GBP/USD pair.
GBP/USD Technical Levels
The spot was last seen trading around 1.2457. An hourly close above 1.2468 (1-hr 50-MA) would expose 1.2486 (1-hr 200-MA), above which the psychological hurdle of 1.25 could be put to test. On the other hand, a breakdown of support at 1.2431 (100-DMA) would open doors for a sell-off to 1.2383 (previous day’s low) and 1.2346 (Feb 7 low).
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