- GBP/USD staged a solid intraday bounce from multi-week lows amid renewed USD selling bias.
- Hotter-than-expected US CPI report failed to impress the USD bulls or stall the strong move up.
- COVID-19 jitters might cap any meaningful upside amid persistent Brexit-related uncertainties.
The GBP/USD pair built on its goodish intraday bounce from four-week lows and shot to fresh daily tops, around mid-1.4100s region during the early North American session.
As investors digested the latest Brexit developments, the pair witnessed a dramatic turnaround on Thursday and has now rallied around 70-80 pips from the daily swing lows near the 1.4075-70 region. The latest leg of a sudden spike over the past hour or so could be attributed to the emergence of some selling around the US dollar, despite hotter-than-expected US consumer inflation figures.
Data published by the US Bureau of Labor Statistics revealed that the headline CPI accelerated to 5% YoY in May from 4.2% previous. This was also higher than consensus estimates pointing to a reading of 4.7%. On a monthly basis, the CPI moderated to 0.6% from 0.8% in April, though was still higher than 0.4% anticipated. Adding to this, the CPI at the core level also surpassed market expectations.
The US fixed income market reacted to the stronger data and pushed the bond yields higher, though did little to impress the USD bulls. Investors seem convinced that the Fed will wait for further evidence to see if inflationary pressure is sustainable before moving to taper its bond purchases. This, in turn, continued acting as a headwind for the USD and provided a goodish lift to the GBP/USD pair.
That said, it remains to be seen if bulls are able to capitalize on the move amid speculations that the UK may delay plans to end restrictions fully on June 21 in light of the spread of the so-called Delta variant. This makes it prudent to wait for some strong follow-through buying before confirming that the GBP/USD pair has bottomed out and positioning for any further near-term appreciating move.
Technical levels to watch
|Today last price||1.4148|
|Today Daily Change||0.0028|
|Today Daily Change %||0.20|
|Today daily open||1.412|
|Previous Daily High||1.4189|
|Previous Daily Low||1.411|
|Previous Weekly High||1.4249|
|Previous Weekly Low||1.4083|
|Previous Monthly High||1.4234|
|Previous Monthly Low||1.3801|
|Daily Fibonacci 38.2%||1.414|
|Daily Fibonacci 61.8%||1.4159|
|Daily Pivot Point S1||1.409|
|Daily Pivot Point S2||1.4061|
|Daily Pivot Point S3||1.4011|
|Daily Pivot Point R1||1.4169|
|Daily Pivot Point R2||1.4219|
|Daily Pivot Point R3||1.4248|
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.