- GBP/USD rises to fresh session high post-CPI.
- Headline CPI prints at highest since March 2012.
- Pair back above 38.2% Fib R
GBP/USD jumped 30 pips to a fresh session high of 1.3380 after the UK Office for National Statistics data reported November CPI at 3.1 percent y/y; the highest level since March 2012. Markets were expecting CPI to print at 3 percent.
Meanwhile, the core CPI came in at 2.7 percent y/y as expected.
As of writing, the spot is trading at 1.3373. The Pound may remain well bid as the 10-year US-UK yield spread has narrowed slightly in the GBP-positive manner. The spread now stands at 116.4 bps vs. pre-data level of 117.1 bps. The spread had widened to 118 bps yesterday; its highest level since Aug. 15.
Still, the gains could be capped around the 5-day MA of 1.3391 as Brexit uncertainty could force the BoE to go slow with policy tightening. Further, the USD may find takers ahead of tomorrow's FOMC rate decision.
GBP/USD Technical Outlook
Haresh Menghani, Editor and Analyst at FXStreet writes, "technically, the pair might now be eyeing for a bullish break through a short-term descending trend-line resistance near the 1.3535 region, above which the upward trajectory is likely to accelerate towards the 1.3600 handle en-route post-Brexit swing high resistance near the 1.3655-60 region, touched in September.
Alternatively, any profit-taking might now find immediate support near the 1.3480 region, which if broken could drag the pair back towards 1.3430-25 area en-route the 1.3385 strong support. A convincing break below the mentioned support levels might now negate any near-term bullish bias and turn the pair vulnerable to head back towards retesting the 1.3320 support area ahead of the 1.3300 handle."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD declines below 1.0700 as USD recovery continues
EUR/USD lost its traction and declined below 1.0700 after spending the first half of the day in a tight channel. The US Dollar extends its recovery following the strong Unit Labor Costs data and weighs on the pair ahead of Friday's jobs report.
GBP/USD struggles to hold above 1.2500
GBP/USD turned south and dropped below 1.2500 in the American session on Thursday. The US Dollar continues to push higher following the Fed-inspired decline on Wednesday and doesn't allow the pair to regain its traction.
Gold stuck around $2,300 as market players lack directional conviction
Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Happy Apple day
Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple.