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  • The BoE will likely raise rates even more as inflation spreads.
  • Investors on the sidelines are waiting for US inflation data.
  • In the charts, the 30-SMA is offering strong resistance.

The GBP/USD price analysis is bearish as investors ignore hawkish statements from the BoE. According to BoE Deputy Governor Dave Ramsden, the Bank of England will likely need to increase interest rates even more from their present 14-year high to combat inflation pressures that are creeping into the British economy.

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Ramsden told Reuters that the spread of inflation, which was initially brought on by the reopening of the global economy following COVID-19 lockdowns and then by Russia’s invasion of Ukraine, was now manifesting itself in rising British wages and business pricing strategies.

As the economy enters a recession and borrowing prices increase, inflation is predicted to decrease to the BoE’s target rate of 2%, from a current high of over 9% and an anticipated peak of 13% in October. Ramsden noted that there was also a danger of an inflation mentality emerging.

“I think it’s more likely that we will have to raise the Ban Rate further. But I haven’t reached a firm decision on that,” Ramsden said in an interview.

The pair is primarily flat today ahead of US inflation data that markets expect will give clues on the Federal Reserve’s next move.

GBP/USD key events today

Form the UK, Bank of England Monetary Policy Committee Member Pill is expected to speak later today. Investors also expect US inflation data bound to cause the pair’s volatility. Year-on-year inflation is expected to drop from 9.1% to 8.7%.

GBP/USD technical price analysis: 30-SMA acting as solid resistance

GBP/USD price analysis

Looking at the 4-hour chart, we see the price in a downtrend after failing to go beyond 1.22795 on August 1. This new downtrend keeps retesting and finding resistance at the 30-SMA. The price pushes off the SMA and will likely make a new low. The RSI is trading below 50 supporting bearish momentum.

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Before the price makes a new low, it will need to break below the August 5 support level at 1.20273. Below this level, the next hurdle for bears will be at the 1.19502 support level. The bias will remain bearish if the price keeps trading below the 30-SMA.

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