GBP/USD Price Analysis: Cable grinds higher past 1.2760 support confluence, UK inflation eyed
- GBP/USD picks up bids to reverse the week-start pullback from the highest levels since April 2022.
- 21-SMA, one-week-old rising trend channel defends Pound Sterling buyers amid hawkish BoE concerns, UK inflation woes.
- Upside break of previous bullish channel adds strength to hopes of witnessing further Cable price run-up.
- RSI, MACD joins lower-high of prices to challenge intraday buyers.
GBP/USD regains upside momentum, after a downbeat start of the week, as it rises to 1.2800 amid the early hours of Tuesday’s Asian session. In doing so, the Cable pair seesaws around the highest levels in 14 months by staying within a one-week-long bullish trend channel.
Apart from the bullish channel, the 21-SMA level and hawkish hopes from the Bank of England (BoE), amid upbeat inflation pressure in the UK, also underpin the upside bias surrounding the Pound Sterling price.
It should be noted that the latest update from Lloyds Bank stated that the British food manufacturers reported the first drop in their production costs since 2016 in May as lower commodity and energy prices and cheaper shipping outweighed a jump in wage bills. The same highlights Wednesday’s UK inflation data ahead of Thursday’s BoE announcements and becomes crucial for the GBP/USD pair traders to watch.
It’s worth noting that the RSI (14) is still overbought and the MACD flashes bearish signals as the GBP/USD price prints a lower-high formation.
With this, the Cable buyers need to witness a clear break of the recent downward spell by crossing the 1.2820 hurdle to recall the bulls.
Following that, the latest multi-day peak of around 1.2850 and the stated channel’s peak of around 1.2910 can lure the GBP/USD buyers before highlighting the 1.3000 round figure.
On the other hand, a downside break of convergence of the 21-SMA and the bullish channel’s lower line, close to 1.2760 by the press time, could trigger the short-term downside of the GBP/USD pair.
However, the top line of the previous bullish channel stretched from late May, surrounding 1.2650 at the latest, can challenge the GBP/USD sellers before welcoming them, even for a short term.
GBP/USD: Four-hour chart
Trend: Further upside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
