18 Tháng Mười 2024, GBP/USD
GBPUSD:
The dollar bulls decided to lock in some profits, which, in turn, supports the pair.
An unexpected drop in UK inflation confirms bets on further rate cuts by the Bank of England and puts pressure on the British pound.
The GBP/USD pair is attracting some follow-through buying during the Asian session on Friday and looks to consolidate an overnight bounce from the 1.2975-1.2970 area, or a two-month low. Spot prices are currently trading in the 1.3020-1.3025 area, up 0.10% on the day amid a moderate decline in the US dollar (USD), although significant appreciation still seems unlikely.
In addition, the unexpected drop in the UK Consumer Price Index (CPI) to its lowest level since April 2021 and below the Bank of England's 2% target paves the way for further interest rate cuts. In fact, money markets are now pricing in the likelihood that the U.K. central bank will cut borrowing costs by 25 basis points (bps) at its upcoming meeting in early November and cut rates again in December, by more than 90%.
This could further deter traders from aggressively bullish bets on the British Pound (GBP) and help hold the GBP/USD pair. Hence, it would be prudent to wait for strong buying before confirming that the recent pullback from the 1.3435 area, or the highest level since March 2022 reached last month, has exhausted itself and positioning for further gains.
Trading recommendation: trade predominantly with Buy orders from the current price level
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