GBP/USD clings to gains near session tops, around 1.2580 region post-UK CPI


  • GBP/USD regained traction on Wednesday built on the overnight rebound from one-week lows.
  • The risk-on mood undermined the safe-haven USD and extended some support to the major.
  • Hotter-than-expected UK CPI remained supportive of the bid tone surrounding the British pound.

The GBP/USD pair maintained its bid tone near session tops, around the 1.2580 region and moved little post-UK inflation figures.

The pair caught some bids on Wednesday and built on the previous day's solid intraday bounce of around 85 pips from the 1.2480 region, or one-week lows. The positive move was sponsored by a weaker tone surrounding the US dollar, which remained depressed amid the upbeat market mood.

The latest optimism about a coronavirus vaccine overshadowed concerns about surging COVID-19 cases in the US, which pushed California back into lockdown. This, in turn, bolstered investors' appetite for perceived riskier assets and continued undermining demand for the safe-haven USD.

Meanwhile, the British pound was further supported by Wednesday’s release of hotter-than-expected UK consumer inflation figures. In fact, the headline CPI rose by 0.6% in June as compared to a modest downtick to 0.4% anticipated from 0.5% previous. The yearly rate also came in better than market expectations and edge higher to 1.1% from 1.0% recorded in May, easing worries about deflationary pressures from the economic downturn.

The pair, however, had a rather muted reaction and lacked any strong follow-through buying, possibly on the back of persistent Brexit-related uncertainties. With the key UK macro data out of the way, the broader market risk sentiment and the USD price dynamics should continue to play a key role in influencing the GBP/USD pair's momentum on Wednesday.

Later during the early North American session, the US economic docket – highlighting the release of Empire State Manufacturing Index and Industrial Production – will be looked upon for some meaningful trading opportunities.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2576
Today Daily Change 0.0022
Today Daily Change % 0.18
Today daily open 1.2554
 
Trends
Daily SMA20 1.248
Daily SMA50 1.2437
Daily SMA100 1.2429
Daily SMA200 1.2702
 
Levels
Previous Daily High 1.2564
Previous Daily Low 1.248
Previous Weekly High 1.267
Previous Weekly Low 1.2463
Previous Monthly High 1.2813
Previous Monthly Low 1.2252
Daily Fibonacci 38.2% 1.2512
Daily Fibonacci 61.8% 1.2532
Daily Pivot Point S1 1.2501
Daily Pivot Point S2 1.2449
Daily Pivot Point S3 1.2418
Daily Pivot Point R1 1.2585
Daily Pivot Point R2 1.2616
Daily Pivot Point R3 1.2669

 

 

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