• GBP/USD registers a 0.42% gain on Wall Street, showcasing a risk-on mood with gains between 0.90% and 1.02%.
  • The UK's annual CPI is projected to dip slightly, but monthly figures are expected to rise, fueling speculations of another BoE rate hike.
  • BoE interest rate probabilities hover around a 50% chance for a 25 bps hike this cycle.

The British Pound (GBP) advances versus the US Dollar (USD) during the North American session, registering gains of 0.42%, on a risk-on impulse while expectations of a sightly high UK inflation report underpin the GBP/USD. At the time of writing, the pair exchanges hands at 1.2200 after bouncing from a daily loss of 1.2128.

GBP/USD rises amid risk-on mood awaiting UK CPI data

As seen by Wall Street registering gains between 0.90% and 1.02%, risk appetite improved. The UK Consumer Price Index (CPI) is expected to dip annually from 6.7% to 6.6%, while core CPI is foreseen at 6%, down from September’s 6.2%. Nevertheless, monthly CPI figures are expected to jump from 0.3% to 0.5%, which would increase speculations for another rate hike by the Bank of England (BoE). Interest Rate probabilities on the BoE remain at around a 50% chance of a 25 bps hike this cycle after the last meeting witnessed a pause on a split vote 5-4.

On the US front, the Chicago Fed President Austan Goolsbee and Philadelphia Fed Patrick Harker remained dovish amid a busy week for Fed policymakers. Harker commented that the current level of rates kept house buyers on the sideline, highlighting that the Fed is likely done hiking rates.

On the data front, the New York Empire State Manufacturing Index for October plunged compared to September’s data, but it came above expectations as new orders dipped, while fewer companies indicated higher prices received, a sign of deflation in the economy.

Given the fundamental backdrop, UK inflation data exceeding estimates would underpin the GBP/USD above the 1.2200 figure. On the flip side, sentiment deterioration and lower inflation could spur flows toward the safe-haven status of the Greenback.

GBP/USD Price Analysis: Technical outlook

The daily chart portrays the GBP/USD as bearish-biased, with the 50-day moving average (DMA) about to cross below the 200-DMA and form a death-cross that could pave the way for further downside. However, if the significant breaks above the latest cycle high seen on October 11 at 1.2337, that would expose 1.2400; otherwise, the GBP/USD could drop below 1.2100 and test the October 4 low of 1.2037 before plunging to 1.2000.

GBP/USD

Overview
Today last price 1.2199
Today Daily Change 0.0057
Today Daily Change % 0.47
Today daily open 1.2142
 
Trends
Daily SMA20 1.2222
Daily SMA50 1.2464
Daily SMA100 1.26
Daily SMA200 1.2444
 
Levels
Previous Daily High 1.2226
Previous Daily Low 1.2123
Previous Weekly High 1.2337
Previous Weekly Low 1.2123
Previous Monthly High 1.2713
Previous Monthly Low 1.2111
Daily Fibonacci 38.2% 1.2162
Daily Fibonacci 61.8% 1.2186
Daily Pivot Point S1 1.2102
Daily Pivot Point S2 1.2061
Daily Pivot Point S3 1.1999
Daily Pivot Point R1 1.2204
Daily Pivot Point R2 1.2266
Daily Pivot Point R3 1.2307

 

 

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