Pound Near 1.3000 After Inflation Data; Euro Falls After Rate Cut
The upward momentum of the U.S. dollar continues to build:
- GBP/USD traded below 1.3000 this week;
- EUR/USD tested 1.0800;
- USD/JPY buyers strengthened the price above the key support level of 150.00.
GBP/USD
On Wednesday, the release of the UK Consumer Price Index (CPI) confirmed market expectations that the Bank of England may soon cut its base interest rate. The CPI showed inflation easing to 1.7% (from a forecast of 1.9%), which could influence the regulators monetary policy.
Following this data, GBP/USD sharply dropped below the key 1.3000 level, testing 1.2970. However, the downward movement did not gain further momentum, and the price rebounded from 1.2970, forming a bullish reversal pattern known as bullish harami. The pair is now testing the 1.3060-1.3000 range as resistance. A breakout above this level could lead to further growth towards 1.3170-1.3130. A rejection from current levels may push the price back down towards 1.2940-1.2870.
Key events to watch today:
- 09:00 (GMT+3): UK Retail Sales Index release;
- 22:30 (GMT+3): CFTC data on speculative GBP positions.
EUR/USD
As predicted by analysts, the European Central Bank (ECB) cut its base interest rate by 25 basis points during its meeting yesterday. However, the lack of detailed commentary on further actions has slowed the EUR/USD decline just above 1.0800.
Technical analysis suggests the possibility of further declines if the price consolidates below 1.0800, as the daily chart shows the completion of a double top pattern. The range for a corrective bounce is seen in the 1.0880-1.0860 area.
Read more: https://fxopen.com/blog/en/ru-pound-near-1-3000-after-inflation-data-euro-falls-after-rate-cut/
Text source: Forex Trading Blog
