GBP/USD slides further below 1.3500 mark on hotter-than-expected US CPI print


  • Resurgent USD demand prompted fresh selling of GBP/USD on Wednesday.
  • Hotter-than-expected US CPI, and a risk-off impulse further underpinned the USD.
  • Brexit woes, dovish BoE weighed on the GBP and supported prospects for further losses.

The GBP/USD pair added to its intraday losses and weakened further below the key 1.3500 psychological mark in reaction to hotter-than-expected US consumer inflation figures on Wednesday.

Following a brief consolidation earlier on in the day, the GBP/USD pair met with fresh supply and extended Tuesday's retracement slide from levels beyond the 1.3600 round-figure mark. The downfall was exclusively sponsored by a strong pickup in demand for the US dollar, which drew support from rebounding US bond yields and a softer risk tone.

Intraday, USD buying picked up pace following the release of the latest US inflation figures, which showed that the headline CPI rose 0.9% MoM in October as against a 0.5% uptick anticipated. Adding to this, the yearly rate jumped to 6.2%, while the core CPI which excludes food and energy prices also surpassed market expectations by a big margin.

The data further fueled speculations that the Fed would be forced to adopt a more aggressive policy response to contain the continuous rise in inflationary pressures. This, in turn, acted as a tailwind for US Treasury bond yields, which continued underpinning the greenback and dragging the GBP/USD pair lower.

Meanwhile, worries that the UK government will trigger Article 16 of the Northern Ireland Protocol, along with the Bank of England's dovish decision last week acted as a headwind for the British pound. This was seen as another factor that contributed to the GBP/USD pair's decline below the 1.3500 mark, setting the stage for additional losses.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3509
Today Daily Change -0.0050
Today Daily Change % -0.37
Today daily open 1.3559
 
Trends
Daily SMA20 1.369
Daily SMA50 1.3693
Daily SMA100 1.3754
Daily SMA200 1.3848
 
Levels
Previous Daily High 1.3607
Previous Daily Low 1.3524
Previous Weekly High 1.3698
Previous Weekly Low 1.3424
Previous Monthly High 1.3834
Previous Monthly Low 1.3434
Daily Fibonacci 38.2% 1.3556
Daily Fibonacci 61.8% 1.3576
Daily Pivot Point S1 1.352
Daily Pivot Point S2 1.3481
Daily Pivot Point S3 1.3437
Daily Pivot Point R1 1.3603
Daily Pivot Point R2 1.3647
Daily Pivot Point R3 1.3686

 

 

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