Gbp to usd rises amidst upcoming us inflation data release

GBPUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.43%	54.7 Pips
Week to-date	-0.61%	-78.5 Pips
April	-0.81%	-104.6 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD CPI Inflation Rate (12-mth)
Fri 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)

What happened lately

In the United States, two significant economic indicators are scheduled for release. The Consumer Price Index (CPI), a key measure of inflation, is set to be announced on Thursday and holds substantial influence because it indicates changes in the price level for consumers in the economy. A higher-than-expected CPI can signal inflationary pressures, which could prompt the Federal Reserve to consider tightening monetary policy. On Friday, the Producer Price Index (PPI) excluding Food and Energy, which provides insight into wholesale inflation pressures by excluding the more volatile components, is due. If this index shows an increase, it might suggest higher inflation expectations, potentially leading to policy adjustments by the Fed to curb inflation.

Despite the absence of significant economic updates in the UK, GBPUSD experienced a 0.43% rise, closing at 1.28176 on Wednesday. This movement could be attributed to market dynamics such as changes in investor sentiment, relative economic predictions, or global geopolitical developments affecting currency valuations.

The upcoming US inflation data releases are likely to have noteworthy implications for GBPUSD. If both the CPI and PPI show stronger-than-expected increases, the likelihood of a tightening monetary stance from the US Federal Reserve would rise, which could strengthen the US dollar. In such a scenario, GBPUSD might experience downward pressure, given the potential for increased demand for the dollar. On the contrary, if both indices reflect weaker-than-expected figures, it may lead to a depreciation of the dollar, possibly resulting in an upward adjustment in GBPUSD, although the actual movement will depend on the concurrent influence of other market factors.

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What can we expect from GBPUSD today?

GBPUSD on Wednesday rose 0.43% to 1.28176. Price is below 9-Day EMA while Stochastic is rising in oversold zone.

Updated daily direction for GBPUSD looks bullish as the pair ended higher after Wednesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.28734 with break above could target R2 at 1.29291 or figure level area. While towards the downside, we are looking at daily low of 1.27429 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.28639 may suggest continuation after recent positive movement.

For the week to-date, take note that GBPUSD is bearish as the pair posted lower by -0.61%.

Key levels to watch out:

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