GBP/USD Gains Support at $1.2165 – Descending Triangle in Play
Skerdian Meta • 2 min read
During the mid-Asian session on Wednesday, GBP/USD has pared its biggest weekly decline in over a week, around 1.2200. As a result, the cable GBP/USD pair applauds the positive UK data and the US dollar’s pullback amid mixed concerns. The market’s anxiety ahead of the week’s key data/events, on the other hand, appears to be undermining the corrective pullback from the weekly low.
The firming of the UK BRC Shop Price Index for May, to 3.1 percent YoY versus 2.8 percent previously, recalled GBP/USD buyers amid expectations of hawkish remarks from Bank of England Governor Andrew Bailey during his appearance at the European Central Bank (ECB) Forum. According to the British Retail Consortium, shop prices have risen since 2008. (BRC).
The US Dollar Index (DXY) falls 0.10 percent to 104.39 as yields prolong the previous day’s pullback from a one-week high, while US stock futures and Asian equities trade mixed. The dollar index benefited from a rise in short-term retail inflationary pressures and progressively hawkish Fedspeak the day before.
Nonetheless, the US Conference Board (CB) Consumer Confidence Index fell to its lowest level since February 2021, falling to 98.7 from 103.20. The specifics point to an increase in one-year consumer inflation rate preconceptions to 8% from 7.5 percent in May.
Given the market’s corrective pullback and stronger UK data, GBP/USD may recover further ahead of the ECB Forum. However, Bailey’s failure to appease hawks has recently become well-known, and the sellers may be recalled if Fed Chair Powell manages to restore bull confidence.
Aside from the ECB Forum updates, the US Core Personal Consumption Expenditure (PCE) for Q1 2022, which is expected to remain unchanged at 5.1 percent, will be important. Furthermore, the final measurements of the US Q1 GDP, which are expected to confirm a 1.5 percent annualized contraction, could aid in forecasting the Cable pair’s intraday movements.
GBP/USD Technical Outlook
The GBPUSD pair resumes its oscillations around the EMA50, testing the bullish channel’s support line on the chart while stochastic attempts to regain positive momentum. As a result, the bullish trend scenario will remain valid if the price remains above 1.2205, reminding you that our next main target is 1.2490.
Today’s trading range is expected to be between 1.2200 support and 1.2370 resistance. Today’s expected trend: Bullish