The U.K. headline inflation rate soared in August and GBP/USD jumped to a fresh twelve-month high. After the biggest surge in clothes, in almost three decades, inflation rate climbed to 2.9% against an increase of 2.7% in July, while the core rate reached the highest level since 2011, at 2.7%. However, we wouldn’t expect Bank of England committee members to change their views for Thursday’s policy meeting. Just two of the policymakers voted for a rate hike in the previous interest rate decision and we would expect only these policymakers to vote for tightening again. The majority is expected to vote for leaving the policy on hold with bank rate at record low of 0.25% and to vote unanimously to keep the stock of U.K. government bond purchases at £435 billion, amid Brexit procedure.
GBP/USD Soared Sharply at 1-Year High Above 1.3265 Critical Level
The strength seen in GBP/USD over the last couple of hours drove the price above the key support level 1.3265 and posted a new one-year high at 1.3288. The daily chart shows that the pair has been in a clear uptrend since January. After the pair tested the diagonal line at 1.2775, rose more than 3.7% and surpassed the 50 and 100 SMAs.
Having the above in mind, if the buyers manage to maintain the price above the 1.3265, the next target for the pair will be the 1.3445 resistance barrier. Our bullish scenario is supported by the MACD oscillator, as it is moving upwards and above its trigger line, suggesting that the price is ready to push higher. Furthermore, the RSI indicator is rising above the 70 level and entered the overbought zone. Alternatively, a failure to end the day above 1.3265 could provide an opportunity to retest the key support level at 1.3000, and thus would negate any bullish scenarios for the pair.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.
72,99% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure: https://www.jfdbank.com/en/legal/risk-disclosure
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.