- The USD took a serious hit from the US inflation data.
- The FOMC Press Conference should bring high volatility.
- Taking out the resistance levels activates further growth.
The GBP/USD price extended its rise and is now located at 1.2637. The dollar’s deeper drop after the US Inflation figures gave a boost to its rivals.
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Fundamentally, the USD took a hit from the US Consumer Price Index yesterday. The CPI m/m reported only a 0.1% growth in May compared to the 0.2% growth estimated and versus the 0.4% growth in April.
CPI y/y came in at 4.0%, less compared to the 4.1% growth forecasted and far below the 4.9% growth in the previous reporting period, while Core CPI registered a 0.4% growth as expected.
Today, the UK GDP reported 0.2% growth matching expectations. Still, the Construction Output, Index of Services, Industrial Production, and Manufacturing Production came in worse than expected.
Later, the US PPI may report a 0.1% growth, while Core PPI is expected to report a 0.2% growth. The bias is bullish, but it remains to see how it reacts tonight around the FOMC.
The Federal Reserve is expected to keep the monetary policy unchanged in the June monetary policy meeting. The FOMC Press Conference, FOMC Economic Projections, and FOMC Statement should bring high volatility.
GBP/USD price technical analysis: Strong bullish bias
Technically, the GBP/USD price developed a new leg higher after retesting the lower median line (LML) of the ascending pitchfork.
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Now, it is almost to hit the median line (ML), representing a dynamic resistance. The weekly R1 of 1.2660 represents an upside target and obstacle as well.
The currency pair is trapped between the median and lower median lines. Taking out the immediate resistance levels validates an upside continuation.
On the contrary, false breakouts and a bearish pattern may indicate that the swing higher is over and that the sellers could take the lead again.
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