GBP/USD plummets to 1.1530 after US inflation data

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  • Dollar rises sharply after US inflation data for August.
  • GBP/USD erases multi-session gains in minutes.

GBP/USD pulled back sharply after the US inflation data pushed the dollar higher across the market. The pair went from trading at weekly highs at 1.1735 to fall as low as 1.1530, the lowest level since Friday.

The pair remains near the lows in a context of dollar strength. The Consumer Price Index showed a year-on-year rise of 8.3%, above the 8.1% expected.

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The report helped settle the Basis for Expectations of an Aggressive Federal Reserve for the next meetings. The key event will be next week and a rise of 75 basis points is expected for said meeting. The decision will be known on Wednesday.

Next week will also be the turn of the Bank of England’s decision, after being postponed for a week due to the death of Queen Elizabeth II. A rise in the reference interest rate is also expected here.

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GBP/USD sharp retracement priced back below 1.1610 (average of 20 in four hours). Should the declines extend, next support is seen at 1.1515 and then 1.1455. A return above 1.1640 would ease downward pressures, while breaking above 1.1670 would expect a test of current week’s highs of 1.1735/40.

Technical levels

GBP/USD

Overview
Today last price 1.1564
Today Daily Change -0.0122
Today Daily Change % -1.04
Today daily open 1.1686
trends
Daily SMA20 1.1713
Daily SMA50 1.1911
Daily SMA100 1.2149
Daily SMA200 1.2739
levels
Previous Daily High 1,171
Previous Daily Low 1.1591
Previous Weekly High 1.1648
Previous Weekly Low 1.1405
Previous Monthly High 1.2294
Previous Monthly Low 1.1599
Daily Fibonacci 38.2% 1.1665
Daily Fibonacci 61.8% 1.1637
Daily Pivot Point S1 1.1615
Daily Pivot Point S2 1.1544
Daily Pivot Point S3 1.1496
Daily Pivot Point R1 1.1734
Daily Pivot Point R2 1.1782
Daily Pivot Point R3 1.1853

Source: Fx Street

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