GBP/USD erases gains and retraces below 1.2300 post-Fed’s Powell appearance at the US Congress
The British pound remains on the defensive and is edging lower on Wednesday, down by a minimal 0.04% in the North American session. At 1.2272, the GBP/USD remains below the 1.2300 figure, despite a hotter than expected UK inflation, while the US Federal Reserve Chairman Jerome Powell testifies in the US Senate. The GBP/USD reached daily lows around 1.2160 during the day but recovered some ground later in the day, registering a daily high at 1.2314. UK inflation heightened to 40-year highs at 9.1% YoY and was the cause of the pound’s fall. Traders should remember that the Bank of England (BoE) forecasted inflation to rise as high as 11% and projected a contraction by 2023. Read more...
Could GBP/USD drop below 1.21?
Looking at GBPUSD Chart, we can see that after a big run from around 1.20 to 1.24, it starts dropping to the current level of 1.2180. Today we could expect it to test its support level at around 1.21 and if able to hold its rate above that level then we should expect an upward bounce otherwise it is possible to see it testing again its lowest level for the year at around 1.20.
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GBP/USD Forecast: Bears look to dominate after UK inflation data
GBP/USD has met fresh bearish pressure early Wednesday and declined below 1.2200. The risk-averse market environment and soft inflation data from the UK weigh on the pair mid-week and the technical outlook suggests that additional losses are likely in the short term. The UK's Office for National Statistics (ONS) showed on Wednesday that the annual inflation in the UK, as measured by the Consumer Price Index (CPI), edged higher to 9.1% in May as expected. On a positive note, the Core CPI, which excludes volatile food and energy prices, declined to 5.9% on a yearly basis from 6.2% in April. Read more...
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