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GBP/USD turns negative from four-week highs as Dollar erases US CPI losses

  • US Dollar tumbles after CPI data, trims losses after Wall Street opening bell.
  • Inflation confirms slowdown in the US, Fed’s Harker expects 25 bps hikes now.
  • GBP/USD reveres sharply, drops below 1.2100.

In a volatile session for FX, the US Dollar has reversed sharply during the last hour and turned positive across the board. The GBP/USD peaked after the release of US inflation data at 1.2244, the highest level in four weeks, and as of writing, it is trading below 1.2100, at the lowest since Monday.

Dollar tumbles then soars

Inflation data triggered a decline of the US Dollar that then recovered as equity prices in Wall Street dropped following the opening bell. The US Consumer Price Index fell in December 0.1% and the annual rate slowed to 6.5% from 7.1%, reaching the lowest level since October 2021.

Following the inflation numbers, Patrick Harker, President of the Federal Reserve Bank of Philadelphia, said it was time for future Fed rate hikes to shift to 25 basis points increments. His comments added fuel to the Greenback's decline as US yields sank.

Equity prices in Wall Street turned negative after the opening. The deterioration in market sentiment was accompanied by a rebound in US yields. The US Dollar reversed its course and rose sharply, erasing all US CPI-losses.

The GBP/USD is struggling to hold above 1.2100 as markets continue to digest CPI numbers and the Dollar keeps looking for a direction. The Pound also weakened during the last hour versus the Euro, with EUR/GBP surging to 0.8890, the highest level since late September. 

Technical levels

GBP/USD

Overview
Today last price1.2139
Today Daily Change-0.0007
Today Daily Change %-0.06
Today daily open1.2146
 
Trends
Daily SMA201.2082
Daily SMA501.1999
Daily SMA1001.168
Daily SMA2001.2005
 
Levels
Previous Daily High1.2179
Previous Daily Low1.21
Previous Weekly High1.2102
Previous Weekly Low1.1841
Previous Monthly High1.2447
Previous Monthly Low1.1992
Daily Fibonacci 38.2%1.213
Daily Fibonacci 61.8%1.2149
Daily Pivot Point S11.2105
Daily Pivot Point S21.2064
Daily Pivot Point S31.2027
Daily Pivot Point R11.2183
Daily Pivot Point R21.222
Daily Pivot Point R31.2261

Author

Matías Salord

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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