Baxia Markets News

Strong UK CPI Boosts Pound Sterling Against USD

Written by Baxia Markets | Apr 17, 2024 9:49:24 AM

GBPUSD has gained traction during Wednesday's European morning, climbing above the 1.2450 level. The Pound Sterling found demand after the UK's Office for National Statistics (ONS) reported that annual inflation edged lower to 3.2% in March. This reading surpassed market expectations of 3.1%, boosting confidence in the UK economy and supporting the Pound.

On the hourly timeframe, GBPUSD's bearish trend has shown signs of weakening. Prices have been trending sideways for the past 2 to 3 trading days, forming a falling wedge chart pattern. The recent breakout above the upper side of this pattern suggests that bullish momentum is taking control.The next key support level for GBPUSD could be around the 200% Fibonacci extension, near the EMA 200 and the upper boundary of the value area drawn by the volume profile, at 1.2540.

The EMA 50 and EMA 200 periods provide further insight into the market trend. The EMA 50 is bending and pointing towards the EMA 200, indicating a slowdown in bearish momentum. Following today's positive UK news release, the market appears to be targeting the EMA 200.

Oscillator indicators also support the bullish sentiment. The RSI has broken free from the bearish zone, rising above the 60% level. Similarly, the MACD has crossed above the zero level, both indicating strength in GBPUSD.

Despite the slow-moving indicators, EMA 50 and EMA 200, suggesting a bearish trend, the current market sentiment seems to indicate a bearish pullback or correction. This is likely to be a deep retracement rather than a reversal, supported by the positive UK inflation data and strong technical indicators.

In summary, GBPUSD has gained momentum, supported by stronger-than-expected UK inflation data. Technical indicators and key levels suggest that the bearish trend may be weakening, with a potential bullish pullback or correction in progress. Traders should monitor the key support and resistance levels, as well as the impact of today's economic data releases, to navigate GBPUSD trading effectively in the coming days.

Key Economic Releases to Watch Today

GBP, CPI

Actual 3.2% vs Forecast 3.1% vs Previous 3.4%

EUR, CPI

Actual 2.4% vs Forecast 2.4% vs Previous 2.6%

USD, Crude Oil

Forecast 1.600M vs Previous 5.841M

 

 

 

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