GBP/USD eyes downside below 1.2420 ahead of UK Inflation, BoE Bailey’s speech eyed

GBP/USD is expected to display more weakness below 1.2420 as the focus shifts to BoE Bailey’s speech.
The USD Index is facing barricades above 103.30 as the upside is capped due to further delay in US debt-ceiling issues.
UK’s inflation is seen declining due to a fall in the oil price.

Sagar Dua FXStreet

The GBP/USD pair looks vulnerable above the immediate support of 1.2420 in the early European session. The Cable is struggling in defending the nearest cushion as investors are awaiting the speech from Bank of England (BoE) Governor Andrew Bailey.

S&P500 futures are holding half of the gains added in Asia, portraying a mildly positive market mood. The US Dollar Index (DXY) is facing barricades above 103.30 as the upside is capped due to further delay in US debt-ceiling issues and the downside is being supported by hawkish commentary from Federal Reserve (Fed) policymakers.

The US Dollar Index (DXY) is expected to remain on the tenterhooks ahead of the preliminary S&P PMI figures (May). Manufacturing PMI is seen softening to 50.0 from the former release of 50.2. While Services PMI is expected to remain steady at 53.6. A second consecutive release of Manufacturing PMI above 50.0 would indicate that the manufacturing sector is coming out of the contraction phase.

On the Pound Sterling front, investors are awaiting the release of the United Kingdom’s Consumer Price Index (CPI) data. As per the preliminary report, the headline UK Consumer Price Index is seen at 8.3%, significantly lower than the prior release of 10.1% annually. Monthly headline CPI has shown a steady growth at 0.8%. Core CPI that excludes the impact of oil and food prices is expected to remain stable at 6.2%.

Going forward, the speech from BoE Andrew Bailey will remain in action. The speech from BoE’s Bailey is expected to provide the interest rate guidance for the monetary policy scheduled for June.

GBP/USD

Overview
Today last price	1.243
Today Daily Change	-0.0007
Today Daily Change %	-0.06
Today daily open	1.2437

Trends
Daily SMA20	1.2515
Daily SMA50	1.2416
Daily SMA100	1.2274
Daily SMA200	1.1971

Levels
Previous Daily High	1.2472
Previous Daily Low	1.2414
Previous Weekly High	1.2547
Previous Weekly Low	1.2392
Previous Monthly High	1.2584
Previous Monthly Low	1.2275
Daily Fibonacci 38.2%	1.2436
Daily Fibonacci 61.8%	1.245
Daily Pivot Point S1	1.241
Daily Pivot Point S2	1.2382
Daily Pivot Point S3	1.2351
Daily Pivot Point R1	1.2468
Daily Pivot Point R2	1.25
Daily Pivot Point R3	1.2527

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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