GBPUSD fails to overcome bearish pressure, trading below 1.3100.
GBPUSD failed to build on Tuesday’s small rebound gains, finishing the day in the red on Wednesday. In the European session on Thursday, the pair fluctuated in a tight band below 1.3100 as the market focused on US inflation data for September.
The US Dollar (USD) strengthened versus its peers after the minutes of the Federal Reserve’s (Fed) September policy meeting revealed a hawkish shift.
Moreover The paper reiterated that “a substantial majority” of Fed Policymakers welcomed the decision to decrease the policy rate by 50 basis points (bps), but there was a broader understanding that this initial step would not commit the Fed to a certain rate of policy easing in the future. Furthermore, the minutes stated that some participants supported a 25 basis point cut, while “a few others” indicated that they may have backed the move as well.
US Bureau of Labor Statistics will publish the September Consumer Price Index (CPI) statistics in the early American session on Thursday.
The US Bureau of Labor Statistics will publish the September Consumer Price Index (CPI) statistics in the early American session on Thursday. On an annual basis, the CPI expected to rise by 2.3%, slower than the 2.5% increase seen in August. The monthly core CPI, which eliminates volatile food and energy costs, is expected growing by 0.2%.
Moreover If the monthly core CPI unexpectedly falls below 0%, the USD may see selling pressure. On the other hand, market positioning indicates that the USD has limited upside potential. Furthermore Investors expect the Fed to leave the policy rate steady by over 20%, with an 80% chance of a 25 basis point (bps) drop in November. Nonetheless, a monthly CPI estimate of 0.3% or higher may help the USD keep its position, making it difficult for GBPUSD to mount a major comeback.
GBPUSD Technical Analysis
The technical picture demonstrates sellers’ supremacy in the short term.
Market players will be eagerly watching the September inflation statistics from the United States.
The Relative Strength Index (RSI) indicator on the 4-hour chart remains below 40. Indicating a negative bias. On On the downside, supports found at 1.3050 (static level), 1.3000 (round level, static level), and 1.2940.
Looking north, the initial resistance level might be found at 1.3100 (Fibonacci 78.6% retracement level of the most recent upswing) before 1.3170 (Fibonacci 61.8% retracement).
