- GBP / USD plummets, falls 160 pips on the day due to high US inflation.
- The US CPI rose at the highest rate in 30 years, reaching 6.2%.
- Brexit: UK and EU seem far from reaching a post-Brexit deal on Northern Ireland.
The pair GBP/USD invest this week’s earnings and some more, plummeting 160 pips in the day, up 1%, and trading at 1.3414 at the time of writing.
US CPI rises at the highest rate in 30 years, reaching 6.2%
On Wednesday, the US reported that the consumer price index US CPI for October rose to 6.2% on an annual basis, higher than the 5.3% expected by analysts. In addition, the core CPI, which excludes volatile energy and food items, increased 4.6% in the same period, more than the 4.3% forecast by market participants.
According to the report, the prices of energy, housing, food and vehicles caused the CPI to rebound. Additionally, inflation is expanding beyond the areas associated with a reopening.
Having said that, USD bulls gained traction, spurring a 160 pip drop in GBP / USD, breaking below intraday support levels such as the November 9 low at 1.3523, followed by the November 8 low at 1.3490, and then the S3 pivot level at 1.3433.
Also, in the last hour or so, Brexit troubles hit the pair as UK and EU seem far from reaching a post-Brexit deal on Northern Ireland.
“EU governments agreed on the need to take “robust” action against Britain if London goes ahead with its threat to invoke unilateral emergency provisions“as reported by Reuters.
According to sources cited by Reuters, “downside risk may emerge for the pound in the next few daysas it seems increasingly likely that the UK will unilaterally suspend parts of the Northern Ireland Protocol. “
That being said, GBP / USD investors should be aware that if the UK activates Article 16, the British pound could potentially sell because the euro zone would not sit still and retaliate against the UK.
GBP / USD technical levels
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