• GBP/USD consolidates the previous day’s gains in a choppy range.
  • UK’s Frost warns of NI turbulence, PM Johnson backs tariff-free trade deal with Australia.
  • Fears of Indian variant probing unlock plans battle BOE’s assurance of no policy adjustments, for now.
  • UK CPI, FOMC minutes will be the key for fresh impulse.

GBP/USD bulls catch a breather around 1.4180-90 after a three-day uptrend that poked yearly high the previous day. In doing so, the cable portrays cautious sentiment ahead of the key UK Consumer Price Index (CPI) data and the US Federal Open Market Committee (FOMC) meeting minutes during early Wednesday.

Other than the pre-data/event caution, Brexit headlines also test the GBP/USD buyers near the multi-day high. UK’s Brexit Minister David Frost warned the European Union (EU), per Independent, “The post-Brexit trading crisis in Northern Ireland (NI) must be solved before the “turbulence” of traditional Protestant celebrations in July.” However, the British diplomat stepped back afterward signaling the move as a push and not a direct warning. On the same line, UK PM Boris Johnson’s support to the tariff-free post-Brexit trade deal with Australia could spark a backlash at home as farmers fear cheap imports.

Meanwhile, the Telegraph came out with the news saying that the plans to ease social distancing in the UK are in disarray amid a jump in the Indian variant of the coronavirus (COVID-19).

Against all odds, the Bank of England (BOE) policymakers’ rejection of any immediate risk to the current policy outlook and need for action joins broad US dollar weakness to back the GBP/USD bulls.

Amid these plays, S&P 500 Futures struggle for a clear direction after the Wall Street benchmarks dropped for the second consecutive day.

Looking forward, the UK CPI for April, expected 1.4% versus 0.7% forecast, will be the key even as Britain witnesses comparatively fewer reflation woes. “The UK inflation data may be watched a bit more closely than usual, with markets wanting to see if the UK data shows any of the same surge that we saw in US CPI for April,” said TD Securities ahead of the release.

Following that, the US FOMC minutes for the latest meeting will be checked to confirm the policymakers’ inflation fears.

Technical analysis

A daily closing beyond the early month top, as well as February 25 high, respectively around 1.4165 and 1.4185, enables GBP/USD bulls to probe the yearly peak surrounding 1.4245.

Additional important levels

Overview
Today last price 1.4189
Today Daily Change 54 pips
Today Daily Change % 0.38%
Today daily open 1.4135
 
Trends
Daily SMA20 1.3963
Daily SMA50 1.3882
Daily SMA100 1.3821
Daily SMA200 1.348
 
Levels
Previous Daily High 1.4147
Previous Daily Low 1.4077
Previous Weekly High 1.4166
Previous Weekly Low 1.3982
Previous Monthly High 1.4009
Previous Monthly Low 1.3669
Daily Fibonacci 38.2% 1.412
Daily Fibonacci 61.8% 1.4104
Daily Pivot Point S1 1.4092
Daily Pivot Point S2 1.405
Daily Pivot Point S3 1.4023
Daily Pivot Point R1 1.4162
Daily Pivot Point R2 1.4189
Daily Pivot Point R3 1.4232

 

 

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