- A new lower low activates more declines.
- Fed Chair Powell Testifies should bring sharp movements later.
- The UK reported higher inflation, so the BOE should take action tomorrow.
The GBP/USD price rebounded in the short term after reaching yesterday’s low of 1.2713. It has climbed as high as 1.2802 today.
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However, the price failed to stay above the 1.28 psychological level, signaling exhausted buyers. The pair is trading at 1.2764 at the time of writing. Yesterday, the USD received support from the US economic data. Building Permits came in at 1.49M above the 1.42M expected, while Housing Starts were reported higher at 1.63M versus 1.40M forecasted.
Today, the currency pair turned upside ahead of the United Kingdom inflation figures. The Consumer Price Index reported an 8.7% growth versus the 8.4% expected, while Core CPI came in at 7.1% compared to 6.8% estimates.
Furthermore, Public Sector Net Borrowing and RPI indicators reported positive data, while PPI Input and PPI Output came in worse than expected.
Later, the Canadian retail sales data could impact the USD. Still, the Fed Chair Powell Testifies represents the most important event. The GBP/USD pair could register sharp movements.
The BOE is expected to increase the Official Bank Rate from 4.50% to 4.75% tomorrow. Further hikes are natural after the UK reported higher inflation.
In addition, SNB, US Unemployment Claims, and Fed Chair Powell Testifies could bring high action.
GBP/USD price technical analysis: Psychological barrier at 1.2800
Technically, the GBP/USD pair found support on the weekly pivot point of 1.2720. It has bounced back but failed to approach the upper median line (UML), which is a dynamic resistance.
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The 1.2800 psychological level stopped the short-term rally.
The price printed only a false breakout with great separation through this upside obstacle, and now it has turned to the downside again.
The weekly pivot point (1.2720) represents a critical downside obstacle. A new lower low and a valid breakdown activate a broader downside movement.
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