- The downside pressure on the GBP/USD price is high after registering false breakouts.
- The US inflation figures should move the rate tomorrow.
- The lower median line (LML) could attract the rate.
The GBP/USD price climbed as high as 1.2654 today, meeting strong resistance. The pair has turned to the downside and is trading at 1.2616. The downside pressure is high in the short term amid broad dollar strength.
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The greenback dominates the currency market ahead of US inflation figures. The Consumer Price Index m/m is expected to report 0.2% growth in January versus 0.3% growth in December. CPI y/y may result in only a 2.9% growth, less compared to the 3.4% growth in the previous reporting period, while the Core CPI could report a 0.3% growth again. These represent high-impact events, so the volatility should be huge.
The GBP/USD pair could register sharp movements in both directions. Lower inflation may weaken the greenback, as the FED could start cutting the Federal Funds Rate sooner. On the contrary, higher inflation should boost the USD.
Furthermore, the UK will release important economic data as well tomorrow. Claimant Count Change could be reported at 15.2K, above 11.7K in the previous reporting period. The average Earnings Index may register 5.6% growth, while the Unemployment Rate is expected to drop to 4.0% from 4.2%.
GBP/USD Price Technical Analysis: Key Resistance at 1.2641
The GBP/USD price retested the 50% Fibonacci line of the ascending pitchfork. However, it registered only false breakouts and has turned to the downside. The breakout above 1.2641 was also invalidated, confirming buyers’ exhaustion.
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Now, it could approach the weekly pivot point of 1.2595, which stands as static support. Failing to approach the median line (ml) indicated a potential sell-off towards the lower median line (LML).
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- Source: https://www.forexcrunch.com/blog/2024/02/12/gbp-usd-price-aiming-to-break-1-26-focus-on-us-cpi/
