- 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
|Today last price||1.2576|
|Today Daily Change||0.0022|
|Today Daily Change %||0.18|
|Today daily open||1.2554|
|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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