GBPUSD Outlook: News Hit Pound Bulls and Offset Positive Impact from Upbeat UK CPI Data

My FX Forum

Staff member
Cable dipped 0.7% and hit session low at 1.3096, following report in The Times that UK PM May could reject EU offer on Irish border. The news soured sentiment, bringing pound under increased pressure, after the currency advanced to new two-month high at 1.3214 on UK inflation report. Data released this morning showed unexpected CPI rise in August (annualized 2.7% vs 2.4% f/c / m/m 0.7% vs 0.5% f/c) which gives further evidence to the BoE for another rate hike at the end of the year. The downside became vulnerable as near-term techs softened on the recent fall which also surged through thick hourly cloud. The notion is supported by daily slow stochastic attempting to reverse from overbought territory and bearish divergence on 14-d momentum. Focus turns on today’s close which would generate negative signal on repeated close below cracked 100SMA / Fibo 61.8% of 1.3472/1.2661 bear-leg. Also, break below daily cloud top (1.3066) which marks strong support, would further weaken the structure and increased risk of reversal.

Res: 1.3163; 1.3214; 1.3280; 1.3301
Sup: 1.3113; 1.3096; 1.3066; 1.3055