- GBP/USD staged a goodish intraday bounce from the 1.3800 mark, or over two-week lows.
- Mixed US inflation figures prompted some USD profit-taking and provided a goodish lift.
- The lack of any strong follow-through buying warrants some caution for bullish traders.
The GBP/USD pair caught some aggressive bids during the early North American session and shot to fresh daily tops, around the 1.3870-75 region in reaction to mixed US inflation figures.
The pair found decent support and attracted some dip-buying near the 1.3800 round-figure mark, or over two-week lows touched earlier this Wednesday. The intraday recovery move got an additional boost following the release of the US consumer inflation figures, which prompted some profit-taking around the US dollar.
The headline CPI decelerate to 0.5% in July from the 0.9% increase recorded in the previous month. Adding to this, core CPI, which excludes food and energy prices, rose 0.3% MoM against 0.4% expected and June's 0.9%. This, along with Richmond Fed President Thomas Barkin's comments, weighed on the greenback.
Barkin noted that it may take a few months more for the US job market to recover enough for the Fed to reduce its crisis-era support for the economy. The combination of factors forced investors to trim their bets for an earlier Fed tapering. This was evident from a sharp pullback in the US Treasury bond yields.
In fact, the yield on the benchmark 10-year US government bond slumped back below the 1.35% threshold. Apart from this, a slightly positive risk tone further acted as a headwind for the safe-haven greenback. That said, the lack of any follow-through buying around the GBP/USD pair warrants caution for bullish traders.
Technical levels to watch
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 holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold clings to strong daily gains above $2,380
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.