GBP/USD Recovers to 1.1900 – What Could Drive Further Uptrend?

The GBP/USD pair has been under selling pressure after failing to hold above the critical level of 1.1900. On a broader level, the Cable

Skerdian Meta•Wednesday, July 13, 2022•2 min read

GBP/USD Recovers to 1.1900 - What Could Drive Further Uptrend?

The GBP/USD pair has been under selling pressure after failing to hold above the critical level of 1.1900. On a broader level, the Cable fell precipitously after giving up the weekly support at 1.1876 and printing new weekly support at 1.1807. The GBP/USD tried a pullback, but the downside remains favored ahead of US inflation data.

Investors anticipate the US Consumer Price Index (CPI) will rise to 8.8 percent from 8.6 percent in the previous edition. However, the core CPI will fall to 5.7 percent from 6 percent previously. Divergence in the two essential catalysts suggests one of two outcomes. First, the plain-vanilla CPI statistic is rising due to volatile food and energy prices. Furthermore, products in the core CPI, such as durable goods, autos, and other necessities, are witnessing a cooling off in their hot price rise.

This suggests that the policy tightening measures implemented by the Federal Reserve (Fed) over the last three monetary policy meetings have begun to bear fruit.

GBP/USD

On the UK front, continuous political upheaval following current Prime Minister Boris Johnson’s departure announcement has worried market participants. With each passing day, the list of candidates for Conservative Party leader becomes longer. Aside from that, investors will be looking at UK economic data. The Gross Domestic Product (GDP) is assessed at 0%, up from -0.3% previously reported, while annual Manufacturing Production may fall to 0.3 percent from 0.5 percent previously reported.

GBP/USD Technical Outlook

The GBPUSD pair achieved our first negative target at 1.1870 and continues to press negatively on it, reinforcing expectations of the bearish wave continuing, reminding you that our next station is at 1.1800.

The EMA 50 continues to support the expected decline, noting that a break above 1.1890 could push the price back to the 1.1980 area before any new decline attempt. Today’s trading range is expected to be between 1.1780 support and 1.1950 resistance.

Today’s expected trend is bearish. Good luck!

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.