VOT Research Desk
Early on Thursday, the GBPUSD reaffirms its intraday high above 1.1410 amid widespread US dollar weakening as traders get ready for the crucial US Consumer Price Index (CPI) for October.
As a result, the Cable pair bounces back from the 50-DMA and returns to the vicinity of a two-month-old declining resistance line.
The recent increase in the quotation may be related to the negative US Treasury rates that followed Neel Kashkari’s remarks at the Minneapolis Federal Reserve (Fed).
The expectations of the UK’s new administration, led by Prime Minister (PM) Rishi Sunak, are also likely to have benefitted the pair purchasers.
However, as of the time of publication, the US 10-year Treasury yields were in a three-day downtrend, hovering around 4.077%, which caused the US Dollar Index (DXY) to fall and undo the previous day’s bounce off the 100-DMA.
Some things are out of our control on inflation, said Fed’s Kashkari. Prior to this, John Williams, the president of the New York Federal Reserve (Fed), said that the relatively stable long-term inflation expectations were positive.
In a similar vein, Richmond Fed President Thomas Barkin stated that while the Fed will have to accept the risk, fighting inflation may cause a decline in the US economy.
As an alternative, a poll by the UK’s Recruitment and Employment Confederation (REC) stated that permanent placements decreased for the first time since February 2021 with the Bank of England now warning of the likelihood of the longest recession in at least a century.
Concerns about the British real estate market are on the same track as the first decline in home prices in the UK in 28 months that occurred in October.
The US stock futures are mildly bid amid these plays, but the Asia-Pacific equities are lagged due to fear ahead of the US CPI.
GBP/USD Technical Analysis
The GBPUSD bears are expected to retest the 50-DMA support at 1.1320 until they provide a daily closing above the two-month-old resistance line, which is close to 1.1600 before press time.
|
Daily SMA20 |
1.1388 |
|
Daily SMA50 |
1.1327 |
|
Daily SMA100 |
1.167 |
|
Daily SMA200 |
1.2284 |
