GBP/USD Price Pares Gains Despite Upbeat UK Inflation

• The bias remains bullish despite the last drop.
• Activating the flag pattern may announce a larger drop.
• The manufacturing and services data from UK/US should be decisive on Friday.

The GBP/USD price rallied today, reaching the daily high at 1.2472, where it found sellers again. After its last sell-off, an upside correction was due.

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Fundamentally, the USD remains sluggish in the short term after the CPI, Core CPI, Core PPI, Retail Sales, and Core Retail Sales indicators came in worse than expected in the last week. Yesterday, the UK and the US data came in mixed.

Today, the British Pound was temporarily boosted by the UK inflation figures. The Consumer Price Index reported a 10.1% growth versus the 9.8% growth expected, while Core CPI rose by 6.2% exceeding the 6.0% growth estimated.

In addition, the PPI, PPI Output, HPI, and RPI also came in better than expected. The US Unemployment Claims, Existing Home Sales, CB Leading Index, and Philly Fed Manufacturing Index could move the rate tomorrow.

Still, the manufacturing and services data represent the week’s most important events. The UK and US economic figures could change the sentiment on Friday.

GBP/USD price technical analysis: Bearish flag pattern

The GBP/USD pair turned upside down after failing to stabilize below the 23.6% retracement level. The price action invalidated a larger correction, so the bias remains bullish.

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It has jumped above the weekly pivot point of 1.2430 and seems determined to approach and reach new highs.

Technically, it has developed an up-channel pattern that could represent a downside formation. As long as it stays above the minor uptrend line, the GBP/USD pair could resume growth.

The descending pitchfork’s upper median line (uml) represents an upside obstacle and target. On the contrary, activating the flag pattern (ascending channel) should announce a new leg down.

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