GBP/USD at fresh weekly highs above 1.1700

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  • UK growth is positive in July but disappointed expectations.
  • The focus is on US inflation figures.
  • GBP/USD rises for the second day in a row and tests the 20-day SMA.

The GBP/USD is rising on Monday and during the American session it rose to 1.1709, reaching the highest level since August 30. Cable remains near highs, holding daily gains and a very short-term bullish bias.

The pound continues to recover from multi-year lows against the dollar. It is testing the 20-day SMA and a consolidation above could open the door to a more sustainable rally.

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The weakness of the dollar awaiting the CPI

The US dollar is falling broadly on Monday, affected by improving risk sentiment and stability in US yields. DXY is down 0.75% to trade around 108.15. The 10-year yield in the US stands at 3.28% and the 2-year yield at 3.52%. The Dow Jones is up 0.90% and the S&P is up 1%, adding to last week’s gains.

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On Tuesday the CPI figures for August in the United States will be released. A decrease of 0.1% in the monthly reading and a drop in the annual rate of 8.5% to 8.1% are expected. The report will be relevant to Fed rate hike expectations ahead of next week’s FOMC meeting. The Bank of England will also have its meeting next week (postponed due to the Queen’s death).

In the UK, July growth data showed a recovery after June’s 0.6% contraction, with an expansion of 0.2%. The figure was below expectations. Labor data will be released on Tuesday and the CPI on Wednesday.

Technical levels

GBP/USD

Panorama
Last Price Today 1.1701
Today’s Daily Change 0.0110
Today’s Daily Change % 0.95
Today’s Daily Opening 1.1591
Trends
20 Daily SMA 1.1732
50 Daily SMA 1,192
100 Daily SMA 1,216
200 Daily SMA 1.2747
levels
Previous Daily High 1.1648
Previous Daily Minimum 1.15
Previous Maximum Weekly 1.1648
Previous Weekly Minimum 1.1405
Monthly Prior Maximum 1.2294
Previous Monthly Minimum 1.1599
Daily Fibonacci 38.2% 1.1591
Daily Fibonacci 61.8% 1.1556
Daily Pivot Point S1 1.1511
Daily Pivot Point S2 1.1431
Daily Pivot Point S3 1.1362
Daily Pivot Point R1 1,166
Daily Pivot Point R2 1.1728
Daily Pivot Point R3 1.1809

Source: Fx Street

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