Bearish Reversing at MAs for GBP/USD Despite Higher UK CPI Inflation
After plunging to its lowest level since mid-March early this month, GBP/USD rebounded for nearly a week, hitting about 1.2035 early last week. The GBP/USD pair sustained its advances until the release of the US CPI inflation report, which showed that inflation figures were higher than expectations, giving the USD a boost.
The price reversed lower late in the week but early this week we were seeing some bullish momentum again. Although there was a major absence of strong bullish momentum and moving averages were acting as resistance at the top, particularly the 100 SMA (green).
The UK inflation report was released later on, which was also higher than expectations, but it failed to have any impact on the GBP, which eventually started to slip lower. The US treasury yields started climbing again and they pulled the USD higher this time, so that pushed the price lower for this pair.
UK October CPI Inflation Report by ONS – 18 October 2023
- September CPI YoY +6.7% vs +6.6% expected
- August CPI was +6.7%
- Core CPI YoY +6.1% vs +6.0% expected
- Prior core CPI YoY was +6.2%
Consumer prices increased by 0.5% in the month, which is in line with expectations. The yearly numbers indicate that price pressures may be more persistent than expected, even if the core estimate eased modestly in August. The pound has risen marginally from 1.2185 to 1.2198, although this does not represent a significant change in the environment for the BOE.
GBP/USD Live Chart
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