• UK data-led modest rebound remains capped amid persistent USD buying.
• Mostly in-line US CPI figures supportive of the broad-based USD strength.
The GBP/USD pair maintained its heavily offered tone, 13-month lows, and had a rather muted reaction to the US macro data.
The pair’s modest attempted recovery move, supported by today’s mostly positive UK macro data, struggled to make it through the 1.2800 handle and was being capped by the prevailing strong bullish sentiment surrounding the US Dollar.
The already stronger greenback got an additional boost following the release of latest US consumer inflation figures, coming in to show a 0.2% m/m rise in July as compared to a modest 0.1% increase in the previous month.
Conversely, the yearly rate held steady at 2.9%, as against 3.0% expected, albeit the disappointment was largely offset by an unexpected uptick in the yearly core CPI print that showed a rise of 2.4%.
Meanwhile, Turkish turmoil continues to drive risk aversion trade across global financial markets and was seen benefitting the USD’s relative safety against its British counterpart, eventually exerting some additional downward pressure on the major.
It would now be interesting to see if the pair is able to find any support at lower levels or continues with its bearish trend amid growing prospects for a no-deal Brexit and highly oversold conditions.
Technical levels to watch
A follow-through selling below 1.2735 level (session low) is likely to accelerate the slide towards the 1.2700 handle en-route 1.2675 support area. On the upside, any recovery attempt back above the 1.2800 handle is likely to find stiff resistance near the 1.2835-40 region.
Powered by WPeMatico