• GBP/USD portrays corrective pullback from weekly low, snaps two-day rebound.
  • Mixed concerns ahead of key data/events join firmer UK second-tier statistics to underpin recovery moves.
  • BOE’s Bailey has a tough task but Powell’s recent failure to please hawks keep pair buyers hopeful.

GBP/USD pares the biggest weekly loss in over a week around 1.2200 during the mid-Asian session on Wednesday. In doing so, the cable pair cheers the upbeat UK data and the US dollar pullback amid mixed concerns. However, the market’s anxiety ahead of the week’s key data/events appears to challenge the corrective pullback from the weekly low.

The firmer prints of the UK BRC Shop Price Index for May, to 3.1% YoY versus 2.8% prior, recalled the GBP/USD buyers amid hopes of hawkish comments from the Bank of England Governor Andrew Bailey during the European Central Bank (ECB) Forum appearance. The shop prices jumped the most since 2008 per the British Retail Consortium (BRC).

The US Dollar Index (DXY) drops 0.10% to 104.39 at the latest as yields extend the previous day’s pullback from a one-week high while the US stock futures and Asia-Pacific equities trade mixed.

The greenback gauge benefited from a jump in the short-term retail inflation expectations, as well as increasingly hawkish Fedspeak, the previous day. That said, the US Conference Board (CB) Consumer Confidence Index dropped to the lowest level since February 2021, to 98.7 versus 103.20 prior. The details hint at the jump in the one-year consumer inflation rate expectations to 8% from May's revised print of 7.5%.

Given the market’s corrective pullback, as well as firmer UK data, GBP/USD may witness further recovery ahead of the ECB Forum. However, Bailey's failure to please hawks has been famous of late and can recall the sellers afterward, provided Fed Chair Powell manages to regain bull’s confidence. Other than the updates from the ECB Forum, the US Core Personal Consumption Expenditure (PCE) for Q1 2022, expected to remain unchanged at 5.1%, will also be important. Additionally, the final readings of the US Q1 GDP, which is likely to confirm a 1.5% Annualized contraction, could also help forecast the Cable pair's intraday moves.

Technical analysis

A six-week-old horizontal area surrounding 1.2155-60 restricts short-term GBP/USD downside amid steady RSI and sluggish MACD. However, the recovery moves need validation from the 10-DMA level of 1.2260 before eyeing the previous support from June 14, at 1.2305 by the press time.

Additional important levels

Overview
Today last price 1.2204
Today Daily Change 0.0021
Today Daily Change % 0.17%
Today daily open 1.2183
 
Trends
Daily SMA20 1.2335
Daily SMA50 1.245
Daily SMA100 1.2845
Daily SMA200 1.3177
 
Levels
Previous Daily High 1.2292
Previous Daily Low 1.2181
Previous Weekly High 1.2324
Previous Weekly Low 1.2161
Previous Monthly High 1.2667
Previous Monthly Low 1.2155
Daily Fibonacci 38.2% 1.2223
Daily Fibonacci 61.8% 1.2249
Daily Pivot Point S1 1.2145
Daily Pivot Point S2 1.2107
Daily Pivot Point S3 1.2034
Daily Pivot Point R1 1.2257
Daily Pivot Point R2 1.233
Daily Pivot Point R3 1.2368

 

 

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