GBP/USD Recovery Attempt Amid Sticky UK Inflation

GBP/USD Recovery Attempt Amid Sticky UK Inflation

The GBP/USD, often referred to as Pound Sterling, is making a determined push for recovery, driven by the UK's inflation report surpassing expectations. The market had anticipated a more subdued reading, but the actual figures came in stickier.

UK Inflation Report Highlights:

UK's headline inflation at 6.7%
UK's core inflation at 6.1%

This unexpected surge in inflation rates could have significant implications for the future monetary policy decisions of the Bank of England (BoE). The stalled inflation report raises the likelihood of further policy tightening in the November monetary policy meeting.

The persistence of a robust Consumer Price Index (CPI) raises questions about whether UK Prime Minister Rishi Sunak will be able to fulfill his promise of reducing inflation to 5.5% by year-end. The repercussions of elevated inflationary pressures are expected to put additional strain on the UK's housing sector, which has been grappling with the challenges of high borrowing costs.

Technical Perspective:

From a technical standpoint, the price currently finds itself within a range area. It is presently reacting to a resistance level. Our analysis suggests a potential bearish impulse in line with the prevailing main trend.


Short-Term Setup | Our preference

Short positions below 1.2250 with targets at 1.2125 & 1.2050 in extension.