- GBP / USD had appreciated following UK inflation data, now extending on dollar weakness.
- Ahead: Fed meeting.
The GBP / USD extended the bullish run and hit highs since Friday at 1.4132 recently, driven by a generalized decline in the dollar, before the start of the American session and the Fed’s decision.
Prior to setting new highs, GBP / USD was already on a positive note, underpinned by a strong pound. Higher-than-expected inflation data in the UK boosted the currency on all fronts. The consumer price index exceeded the Bank of England’s target for the first time in nearly two years. On the downside for the currency, the lack of resolution by the Northern Ireland protocol continues.
When it comes to the dollar, the focus is on what will happen to the Federal Reserve. No changes are expected in the interest rate, or in the purchase program. The focus will be on possible mentions of a cut in the purchasing program and new projections from FOMC members.
From a technical point of view, GBP / USD has eased downward pressure following the rebound that started Tuesday from a month-long lows at 1.4035. The next strong resistance is at 1.4150, where the 20-day moving average is passing. A return below 1.4065 would expose recent lows.
Technical levels
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