August 10, 2022 16:55:31
The Great Britain pound gained handsome gains on Wednesday following a sell-off in the U.S. dollar. Despite a weaker economic outlook, the GBP/USD gained traction on softer U.S. consumer inflation data.
In the recent data, the U.S. consumer price remained unchanged in July after advancing 1.3% in June. The sharp drop in the cost of gasoline helped eased the much-awaited data. U.S. CPI inflation surged 8.5% in July, unchanged from June, but below the market consensus of 6.1%.
Investors assessed the data and took it as a sign that Federal Reserve would not opt for another super-sized interest rate hike in September.
The U.S. 10-year benchmark yield dropped on Wednesday following cooler inflation data. The yield tumbled nearly 9 basis points to 2.71%, the lowest level in one-week added tailwind for the greenback.
The dollar index slipped below the 105 mark for the first time in a month.
On the domestic economic front, investors bracing for GDP data for Q2 due Friday. In the previous week, the Bank of England (BoE) gave a grim economic outlook.
GBP/USD consolidates gains below 1.2250
On the daily chart, the GBP/USD pair jumped to test the session high near 1.2270. The price refreshes the high level seen in the last 10-day.
The price is taking support at the 50-day exponential moving average (EMA) at 1.2190. However, the pair retraced below 1.2250, indicating the dried buying momentum at a higher level.
The RSI (14) spiked to 56 from 42, strengthening the bullish outlook.
To continue with upside momentum, the pair should close at 1.2250. Next, the price could test the 1.2400 psychological level.
On the flip side, a formation of a Doji candlestick indicates indecision among traders. A break below 1.2190 would invalidate the bullish thesis.
Although Moneta Markets aims to ensure that the information/material is accurate, it cannot be held responsible for any omissions/miscalculations or mistakes as it does not warrant the accuracy of such material. Any material and/or content provided herein is intended for educational purposes only and does not constitute investment advice on how clients should trade as it does not take into consideration your personal objectives, financial circumstances or needs. Please seek independent advice before making any trading decisions. Reliance on such material is solely at your own risk and Moneta Markets cannot be held responsible for any losses resulting directly or indirectly from such reliance. Any reference to figures/statistics or numbers refers to the group of companies of Moneta Markets. Please refer to the legeal documents should you require more information.
