19 June 2024, GBP/USD
Event to pay attention to today:
09:00 GMT+3. GBP - Consumer Price Index
GBPUSD:
The GBP/USD pair has been unable to make meaningful gains on Wednesday and has been fluctuating in a narrow trading range around the round 1.2700 mark during the Asian session. Spot prices, meanwhile, are holding above the one-month low reached last Friday as traders await the release of the latest UK consumer inflation data with interest before positioning themselves for the next leg of directional movement.
The UK core consumer price index is expected to rise to 0.4 per cent in May from the previous reading of 0.3 per cent, while the annual rate is expected to slow to 3.5 per cent from 3.9 per cent in April. The data will play a key role in influencing the British pound (GBP) and will provide some momentum to the GBP/USD pair. The market will then turn its attention to Thursday's Bank of England (BoE) monetary policy meeting, which will help determine the currency pair's near-term trajectory.
In the run-up to key central bank data and risks, weak US Dollar (USD) price action has been a key supportive factor for the GBP/USD pair. Tuesday's weaker-than-anticipated US retail sales report indicated signs of consumer fatigue and confirmed speculation that the Federal Reserve (Fed) may begin cutting interest rates in September. This led to an overnight decline in US Treasury bond yields and is thought to have undermined the dollar.
The aforementioned fundamental backdrop supports the prospects for a significant strengthening of the GBP/USD pair. Nevertheless, the absence of follow-through buying calls for caution before taking a position on the continuation of the recent rebound from the mid-1.2600s or the one-month low reached last Friday.
Trading recommendation: Trading predominantly Buy orders from the current price level.
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