GBP/USD Forecast: Pressured ahead of US CPI
GBP/USD Current price: 1.3810
- Dollar keeps rallying on the back of news related to government’s financial support.
- The focus is on US inflation, as the core annual reading for July is foreseen at 4.3%.
- GBP/USD is barely holding above 1.3800, technical readings hint at a slump.
The GBP/USD pair nears the 1.3800 level, as the greenback retains its strength. The American currency keeps advancing on the heels of Tuesday’s news, as the US Senate passed the infrastructure bill, now in the House. Fresh financial support hints at steeper growth in the country. Hence, the dollar strengthens alongside Wall Street, with major indexes flirting with record highs.
The UK macroeconomic calendar had nothing relevant to offer this week, with the focus still 0n the US. After the country published an upbeat employment report on Friday, it will provide an inflation update today. The July US Consumer Price Index was preliminarily estimated at 5.4% YoY, now expected to be confirmed at 5.3%. The core reading is expected to be downwardly revised from 4.5% to4.3%.
GBP/USD short-term technical outlook
The GBP/USD pair is poised to extend its decline, accelerating south in the near-term. The 4-hour chart shows that it has broken below all of its moving averages, with the 20 SMA gaining bearish momentum above the longer ones. Technical indicators head lower within negative levels, with the RSI approaching oversold territory. Further declines are likely, although the next directional movement will depend on how speculative interest reads US inflation data.
Support levels: 1.3790 1.3755 1.3710
Resistance levels: 1.3830 1.3880 1.3920
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
