- The reversal of the British pound finds support at 1.3745 before recovering above 1.3800.
- The pair faltered after weaker-than-expected UK inflation data.
- GBP / USD approaching key resistance at 1.3910 / 30 – SocGen.
The GBP it resumed its uptrend on Wednesday, to resume the rally of the past two weeks after a corrective reversal seen during the European session. The pair GBP/USD It has found buyers at 1.3745, to bounce again during the US trading time and return above 1.3800, a few pips below the month-long highs at 1.3835.
UK inflation figures weigh on the British pound
According to National Statistics data released today, the UK CPI accelerated at an annual rate of 3.1% and 0.3% in September, disappointing expectations of increases of 3.2% and 0.4%, respectively. These figures have dampened expectations of higher consumer inflation, which would add pressure on the Bank of England to accelerate its monetary normalization plan.
Rising energy prices have raised consumer prices well above the Bank’s price stability target, prompting Bank of England officials, namely the bank’s Governor, Andrew Bailey, to suggest the possibility of accelerating the monetary policy normalization plan and, therefore, driving the pound’s rally from the end of September.
The weakness in the British pound, however, has been short-lived, and the risk-sensitive sterling has been boosted by positive market sentiment. Optimistic quarterly earnings from the healthcare sector have broadened the risky mood observed Tuesday, dispelling concerns about higher prices and supply chain disruptions, ultimately weighing on demand for the US dollar. safe haven.
GBP / USD should break 1.3910 / 30 to see further appreciation – SocGen
From a technical perspective, Société Générale’s currency analysis team warns of a key resistance area at 1.3910 / 30: “GBP / USD is approaching the potential hurdle of 1.3910 / 1.3930 which represents the recent spike and pullback. 61.8% since June. Overcoming this resistance zone would be crucial for the next leg of the rebound (…) If the 1.3910 / 1.3930 zone is not recovered, a short-term pullback may occur. 1.3670 and last week’s low of 1.3570 are short-term supports. “
Technical levels
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