GBP/USD Crosses Above $1.1650 – UK CPI Figures Ahead
Despite falling from a three-month high in early Wednesday morning Europe, the GBP/USD seesaws around 1.1870, attempting to defend the bulls. The Cable pair’s recent inaction might be attributed to conflicted feelings about Russia and a cautious atmosphere ahead of critical statistics from the UK and the US.
Indecision about Russian missiles fired at the Polish-Ukrainian border recently tested the market mood and GBP/USD traders. Following the missile launch, which killed two individuals, policymakers from NATO and the Group of Seven Nations (G7) convened in an emergency meeting. However, US President Joe Biden recently stated that, based on the trajectory, missiles fired from Russia are doubtful.
Even though the US Producer Price Index (PPI) dropped, the disappointing employment numbers in the UK did not stop GBP/USD bulls. However, the UK’s claimant count change jumped to 3.3K vs. -12.6K projections and 25.5K previously, while the unemployment rate grew to 3.6%, exceeding the market consensus and earlier readings of 3.5%.
In contrast, US PPI for October fell to 8.0% year on year, compared to market expectations of 8.3% and a downwardly revised prior of 8.4%. The monthly data exceeded the previous month’s revised 0.2% (from 0.4%) while falling short of the 0.5% forecast. Furthermore, the Federal Reserve Bank of New York’s Empire State Manufacturing Index increased to 4.5 in November from -9.1 in October and -5 expected by the market.
On a related front, expectations of an increased burden on consumers owing to the UK’s approaching Autumn Statement, planned for publication on Thursday, and an anticipated increase in US retail sales for October, expected at 1.0% versus 0.0% previously, kept GBP/USD bears optimistic.
However, recent diplomatic maneuvers by UK Prime Minister (PM) Rishi Sunak have suggested a good surprise, which might boost the cable price if today’s British Consumer Price Index (CPI) matches the bullish 10.7% YoY estimates for October versus 10.1% previously.
But reflecting the optimism, Wall Street ended with fewer gains than the early-day swings, while US 10-year Treasury yields remain at a six-week low. Nonetheless, the S&P 500 futures fell from their monthly high.
GBP/USD purchasers might expect further positive momentum if the upcoming data/events match market expectations.
GBP/USD Technical Outlook
The GBP/USD pair was able to break through the resistance of the bullish flag. This turned on the pattern’s positive effect and started a rally that should lead to more gains in the coming sessions.
The next main targets are 1.1920 and 1.2000, which will keep the bullish trend scenario active unless the price breaks and stays below 1.1700.
Today’s trading range is expected to be between 1.1700 support and 1.1870 resistance.
Today’s expected trend: Bullish
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