Currently, GBP/USD is trading at 1.3180, down -0.06% on the day, having posted a daily high at 1.3213 and low at 1.3140.
GBP/USD is recovering towards 1.3200. Cable fell to 1.3140, breaking yesterday's low on stops after rising to 1.3218 on modest UK earnings beat. UK earnings +2.2% vs +2.1% forecasted, ex-bonus +2.1% vs +2.0% forecasted.
UK: CPI inflation to have hit 3.0% y/y in Sept – RBC CM
The data was strong enough to persuade markets that the BoE is a little more likely to raise rates in the near future, with Nov still favoured. Market priced Nov rate hike risk at a 75% chance of 25bps tightening last week. Probabilities have improved to 83% today, explained analysts at Scotiabank.
GBP/USD levels
Analysts at Commerzbank explained that GBP/USD probably ended a minor Elliott wave abc correction at last week’s 1.3338 high, made close to the 50% retracement at 1.3343. "While this level caps attention should remain on the 1.2996 2016-2017 uptrend line. This is the break down point to the 1.2830 38.2% retracement and the 1.2575 50% retracement. The currency pair has recently failed at the 1.3557 2014-2017 downtrend and is thus viewed negatively. Above 1.3343 (50% retracement) would trigger a deeper recovery to potentially 1.3417/1.3523, the 61.8% and 78.6% Fibonacci retracement levels," the analysts explained on a wide forecast.
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