- GBP/USD has remained capped under 1.3200 on Thursday, unable to track the euro’s post-ECB move higher as global equities fade.
- Ahead, focus turns to the release of US Consumer Price Inflation data at 1330GMT, which could trigger further choppiness.
As Wednesday’s broad optimism that saw global equities rally fades on Thursday ahead of remarks from ECB President Christine Lagarde after a surprisingly hawkish ECB policy announcement, and ahead of the release of key US inflation data for February, following earlier high-level Russia/Ukraine meetings that seemingly didn’t go as well as hoped, GBP/USD remains capped below 1.3200. The pair is currently trading flat in the 1.3175 area, having failed to track the post-ECB move higher in the euro as 1.3200 continues to act as a barrier. The pullback in global equities following yesterday’s rally, which some said at the time wasn’t fully rational giving the still bleak geopolitical picture in Ukraine and recent historic surge across commodity markets, isn’t the only thing blocking GBP/USD from advancing.
Traders are having a tough time pushing the pair above resistance in the form of last year’s lows in the 1.3160-70 area. Should broad optimism return, perhaps in the form of fresh hope for a Russia/Ukraine ceasefire, or perhaps if US inflation data surprises to the downside (hurting USD), an upside break is on the cards. That would open the door for GBP/USD to rally towards late February/early March lows in the 1.3270 area.
But on the other hand, a hotter than expected US inflation report (for reference, headline CPI is seen nearing 8.0%) could trigger a drop back towards this week’s sub-1.3100 lows. Bear in mind that the upcoming data is for February, prior to the breakout of war in Ukraine and prior to the historic surge in global commodity prices. There is always a risk that Thursday’s report triggers fresh chatter about a 50bps hike from the Fed later this month.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks

AUD/USD faces some selling pressure to near 0.6250 amid trade war threat
The AUD/USD pair attracts some sellers to near 0.6245 during the early Asian session on Monday. The US Dollar edges higher amid the fear of a trade war threat. Trump said on Friday he plans to announce reciprocal tariffs on many countries by Monday or Tuesday, without specifying which countries.

EUR/USD: US trade war and Powell’s testimony in the eye of the storm
The EUR/USD pair ends the week trading at around 1.0370, little changed from its previous weekly close of 1.0361. Tensions related to the United States trade war with its major counterparts dominated financial boards in the last few days and will likely remain as the main market mover.

Gold sets new record-high as US yields push lower
Gold touches yet another all-time high, boosted by falling US T-bond yields. Fed Chair Jerome Powell’s testimony, January US inflation data, and political headlines could drive Gold’s action next week. The near-term technical outlook points to overbought conditions for XAU/USD.

Week ahead: Will US CPI be a positive distraction amid Trump’s dramas?
US consumer and producer prices to be main focal point. UK economic output data to be watched too. But Trump and tariff headlines might be a bigger market driver.

Top Trumps: The global economy’s House of Cards
The year has barely started and we are learning the hard way what Donald Trump’s second term in office means for markets, analysts and global policymakers. It's like living through an episode of the political thriller, House of Cards.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.