Breaking: GBP/USD rises towards 1.3650 as UK annualized CPI beats estimates with 5.4% in Dec

UK CPI rises by 5.4% YoY in December vs. +5.2% expected.
Monthly UK CPI arrives at +0.5% in December vs. +0.3% expected.
GBP/USD edges higher above 1.3600 upbeat UK CPIs.

FXStreet Team FXStreet

The UK Consumer Prices Index (CPI) 12-month rate came in at 5.4% in December when compared to +5.1% registered in November while beating expectations of a +5.2% print, the UK Office for National Statistics (ONS) reported on Wednesday.

Meanwhile, the core inflation gauge (excluding volatile food and energy items) rose by 4.2% YoY last month versus +4.0% booked in November, outpacing the consensus forecast of +3.9%.

The monthly figures showed that the UK consumer prices arrived at +0.5% in December vs. +0.3% expectations and +0.7% prior.

Main points (via ONS):

“The largest upward contributions to the December 2021 CPIH 12-month inflation rate came from housing and household services (1.31 percentage points) and transport (1.29 percentage points, principally from motor fuels and second-hand cars).”

“The largest upward contributions to the change in the CPIH 12-month inflation rate between November and December 2021 came from food and non-alcoholic beverages, restaurants and hotels, furniture and household goods, and clothing and footwear.”

“These were partially offset by large downward contributions to change from transport, and recreation and culture.”

GBP/USD reaction

In an initial reaction to the upbeat UK CPI numbers, the GBP/USD pair ticked a few pips higher to clinch fresh daily highs of 1.3617 before reversing quickly to pre-data release levels of around 1.3605. The spot is up 0.08% on the day.

GBP/USD technical levels

GBP/USD

Overview
Today last price	1.3606
Today Daily Change	0.0013
Today Daily Change %	0.10
Today daily open	1.3591

Trends
Daily SMA20	1.354
Daily SMA50	1.3408
Daily SMA100	1.355
Daily SMA200	1.3736

Levels
Previous Daily High	1.3662
Previous Daily Low	1.3573
Previous Weekly High	1.3749
Previous Weekly Low	1.3532
Previous Monthly High	1.355
Previous Monthly Low	1.3161
Daily Fibonacci 38.2%	1.3607
Daily Fibonacci 61.8%	1.3628
Daily Pivot Point S1	1.3555
Daily Pivot Point S2	1.3519
Daily Pivot Point S3	1.3466
Daily Pivot Point R1	1.3644
Daily Pivot Point R2	1.3697
Daily Pivot Point R3	1.3733

Author

FXStreet Team

FXStreet

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.