GBP/USD: Recovery towards 1.3100 on its way ahead of UK CPI

  • Recent risk-on and likely positive outcome of the UK inflation helps the British Pound (GBP) to recover.
  • 1.3100/05 resistance-area seems to be on the buyers’ radar.

GBP/USD recovers from a nine-week-old ascending trend-line as it trades near 1.3055 ahead of the London open on Wednesday. Absence of negative Brexit news reports and support from data front seemed to have played their roles while traders await the British inflation numbers.

Off-late the flow of Brexit updates has been light due to the Easter recess in the UK parliament. However, chatters of slow progress in the cross-party talks and members of the parliaments (MPs) to get a vote to over the EU customs union pact gained market attention.

On the economic side, higher than expected claimant count change and soft average earnings excluding bonus from the UK confronted with the US industrial production which dropped to -0.1% versus +0.2% expected.

Moving on, March month consumer prices index (CPI) from the UK and February month trade balance figures from the US will be up on the market’s radar.

The British inflation figure is expected to increase by 2.0% from 1.9% on a YoY basis whereas the US trade balance could register higher than the previous $-51.1 billion deficit of $-53.7 billion.

It should also be noted that market risk tone has been positive recently due to China’s upbeat data-dump. The US 10-year government bond yields are near to the highest since mid-NMarch by being around 2.56%.

GBP/USD Technical Analysis

An upward sloping support-line stretched since February 14, at 1.3030, restricts the pair’s near-term declines, a break of which can highlight 200-day simple moving average (SMA) level of 1.2970 and 1.2950 including 100-day SMA.

Alternatively, 50-day SMA and a five-week long descending trend-line around 1.3100 – 1.3105 seems a tough resistance on the upside. In a case where prices rally beyond 1.3105, 1.3130 and 1.3200 may come back on the chart.

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

NZD/USD jumps over 50 pips to print 29-month high on hints of RBNZ's remit change

NZD/USD rises to fresh highs since June 2018. New Zealand Finance Minister Grant Robertson hints at adding house prices to the mandate. Risk-on mood also favors the kiwi bulls amid a light calendar.


Gold in bearish consolidation below $1840, remains vulnerable

Gold (XAU/USD) is nursing losses in Tuesday’s Asian trading, having slumped 2% on Monday to reach the lowest levels in four months at $1831. Vaccine progress, stronger US data hammer gold prices. Focus on vaccine updates and risk sentiment for fresh impetus.

Gold news

AUD/USD advances above 0.73 on Biden transition news, mixed Aussie data

AUD/USD extends gains above 0.7300 amid mixed Australian trade data and the upbeat market mood. The risk sentiment got a boost following reports that the US GSA has started the formal Biden transition process. S&P 500 futures rise 0.50%. RBA Debelle's speech awaited. 


S&P 500 Futures looks to regain 3,600 as US GSA begins Biden transition

S&P 500 Futures gains half a percent in a fresh bid wave, nearing 3,600. Wall Street also marked upbeat performance in the last hours. Trump concedes defeat while ordering the GSA to start the transition. Odds that ex-Fed Chair Yellen will become Treasury Secretary, vaccine hopes favor the bulls.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info