- During yesterday's trading session, the GBP/USD currency pair jumped to the resistance level of 1.3292, the highest for the pair in six months, before settling around the 1.3240 level at the start of today's Thursday trading.
- According to licensed trading platform data, the GBP/USD price has moved towards its longest winning streak since July, primarily due to the weakness of the US dollar, even after the UK Consumer Price Index data came in lower than expected.
UK Inflation and the Impact on the Bank of England's Policy
According to the results of the c. Inflation slowed more than expected, with the UK headline CPI falling to 2.6% year-on-year and services inflation declining to 4.7%, easing pressure on the Bank of England. This has prompted traders to slightly increase their bets on interest rate cuts, now expecting an 86-basis point cut by the end of the year. Financial markets are now anticipating a fourth rate cut in December, as slower price growth could give the Bank of England room to support the economy amid global trade uncertainty and rising living costs.
Regarding global trade tensions, US President Donald Trump stated that he might force countries to choose between trade relations with the United States and trade relations with China, threatening a potential division of the global economy and financial markets. Furthermore, Republicans in Congress assert that what begins with tariffs and trade differences extends to capital and other areas, and they propose legislation that would penalize holders of US financial assets for anyone from a country that imposes a "discriminatory" tax.
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Trading Tips:
Dear TradersUp website follower, the Pound is a risk currency that is also affected by investor sentiment and positive markets, so monitor the influencing factors to anticipate its future gains or lack thereof.
Generally, there was nothing noteworthy or that would change the Bank of England's policy, and the Bank is likely to cut interest rates three times this year in a slow path towards interest rate normalization. Accordingly, this may cause slight downward pressure on Sterling trading.
Technical Analysis for the GPB/USD pair today:
The overall trend for the GBP/USD currency pair remains bullish, and breaking the 1.3300 resistance confirms the strength of the bulls' control over the trend. However, at the same time, technical indicators are stabilizing above the overbought zones, which means that without further bullish momentum, we may see profit-taking sell operations at any time. The MACD and the 14-day RSI confirm that the recent gains have reached overbought territory, and the short and medium-term moving averages are heading upwards. The daily close will determine the future of Sterling/Dollar for the coming week, as tomorrow's session will see more global market holidays.
On the downside, based on the performance on the daily chart, a move towards the 1.3135 support level would be a strong and clear threat to the current uptrend.
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