Slobodan Drvenica
Windsor Brokers
GBP/USD
Cable edged lower in European trading on Tuesday, after attempts at pivotal barrier at 1.2343 (Mar 23 high) stalled just under the target but keeps overall firm bullish stance.
The latest inflation data and comments from BOE Governor Bailey fuel expectations for further rate hikes, which underpins the pound.
Governor Bailey highlighted that fighting inflation remains the key job for BOE policymakers and recent rising worries about the health of global banking system should not obstruct their primary task.
The latest data showed that soaring food prices pushed inflation in British shops to the highest in nearly two decades, with comments Britain’s Retail Consortium that shop price inflation has yet to peak, adding to growing expectations that the BOE would for for the twelfth consecutive rate hike in May.
This creates positive environment for pound, which is already in near-term uptrend, as bulls challenge 1.2343 pivot, the last obstacle on the way towards key barrier at 1.2447 (peaks of Dec 2022/Jan 2023) which also mark the ceiling of larger range.
Bullish daily studies offer additional support, with potential deeper dips expected to stay above solid support at 1.2185 (daily Tenkan-sen) to keep bulls intact.
Res: 1.2330; 1.2343; 1.2402; 1.2446.
Sup: 1.2270; 1.2217; 1.2185; 1.2154.
Interested in GBP/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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We haven’t seen a lot in the way of volatility and price action this week, but what we have seen is a clear message coming from many central banks. That message is one of hawkishness.