GBP/USD bears move in on 1.38 and eye 1.3780s daily target

In recent trade, GBP/USD pierced the psychological 1.38 figure and scored the lowest level since the end of July at 1.3794. 

The US dollar perked up on Thursday following upstream US inflation data in the Producer Price Index which posted their largest annual increase in more than a decade in the 12 months through July.

This was a welcomed event by US dollar bulls that had been otherwise disappointed in the prior day's benign reading of Consumer Prices.

Overall, combining both data, it is suggesting that inflation pressures remain strong which has tipped the market in favour of the greenback. 

The producer price index (PPI) for final demand increased 1.0% last month after rising 1.0% in June.

In the 12 months through July, the PPI jumped 7.8%, a record high since the measure was introduced just over a decade ago.

Meanwhile, earlier in the day, there was a modest offer in sterling markets following the release of the UK's growth figures which suggested that the pace of growth may have already apexed. 

The Office for National Statistics said the economy grew by 4.8% in the second quarter, in line with a Reuters poll of economists' quarter-on-quarter expectations.

This, to some extent, has undermined the hawkish tilt at the prior Bank of England's meeting and the pound has been bent out of shape as it loses traction again, en-route to a test of critical daily support.

GBP/USD technical analysis

The pound is on course for a test of the 23 July candlestick's highs of 1.3780.

The level would be expected to act as support on initial tests (as US dollar corrects) and potentially send the pound into a consolidation in the 1.3780/1.3830 areas. 

Meanwhile, the US dollar could have made a meanwhile top ahead of the Jackson Hole: