• GBP/USD caught some bids following the release of hotter-than-expected UK CPI figures.
  • The USD bulls remained on the defensive and further contributed to the strong move up.
  • Investors, however, refrained from placing fresh bets ahead of the central bank meeting.

The GBP/USD pair shot to a fresh weekly high, around the 1.3260-65 region in reaction to hotter-than-expected UK inflation figures, albeit quickly retreated a few pips thereafter. The pair was last seen trading with only modest intraday gains, just below mid-1.3200s.

The pair attracted some buying for the second successive day on Wednesday and is now looking to build on the previous day's bounce from sub-1.3200 levels. A softer tone surrounding the US Treasury bond yields kept the US dollar bulls on the defensive through the early European session. This, in turn, was seen as a key factor that extended some support to the GBP/USD pair.

The intraday buying picked up pace after data released from the UK showed that the headline CPI rose 0.7% MoM in November and accelerated to 5.1% YoY. Adding to this, core CPI jumped 4% YoY from 3.4% previous. The readings were well above consensus estimates and provided a strong boost to the British pound, though bulls once again struggled to find acceptance above 200-hour SMA.

Given the imposition of fresh COVID-19 restrictions in the UK, the data did little to revive hopes for an imminent interest rate hike by the Bank of England at its upcoming meeting on Thursday. This, in turn, acted as a headwind for the British pound and kept a lid on any meaningful upside for the GBP/USD pair amid persistent Brexit-related uncertainties.

Investors also seemed reluctant to place aggressive bets, rather preferred to wait on the sidelines heading into the key central bank event risks. The Fed is scheduled to announce its monetary policy decision later during the US session. This will be followed by the BoE meeting on Thursday, which will play a key role in determining the near-term trajectory for the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3242
Today Daily Change 0.0020
Today Daily Change % 0.15
Today daily open 1.3222
 
Trends
Daily SMA20 1.3313
Daily SMA50 1.3502
Daily SMA100 1.3632
Daily SMA200 1.3778
 
Levels
Previous Daily High 1.3257
Previous Daily Low 1.3191
Previous Weekly High 1.3289
Previous Weekly Low 1.3161
Previous Monthly High 1.3698
Previous Monthly Low 1.3194
Daily Fibonacci 38.2% 1.3232
Daily Fibonacci 61.8% 1.3216
Daily Pivot Point S1 1.319
Daily Pivot Point S2 1.3158
Daily Pivot Point S3 1.3125
Daily Pivot Point R1 1.3255
Daily Pivot Point R2 1.3289
Daily Pivot Point R3 1.332

 

 

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