Pound steady vs dollar before US inflation data
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The Pound Sterling consolidates in a narrow range as investors shift focus to Wednesday’s US Consumer Price Index (CPI) data. Analysts predict limited impact on Federal Reserve rate prospects unless inflation data dramatically deviates from expectations.
Fed officials have consistently expressed confidence in inflation moving towards the 2% target, but hawkish voices, such as Governor Michelle Bowman, stress the need for caution in lowering rates.CME FedWatch suggests an almost 90% probability of a 25 bps rate cut at the December 18 meeting.
Upcoming Key Data Points
US Unit Labor Costs: Expected growth of 1.9% in Q3.
UK GDP and Factory Data: Investors await October data later this week, with expectations of a recovery after September declines.
Technical Outlook: GBP/USD
Resistance Levels:
1.2800: Key psychological level.
1.2830: 200-day EMA acting as a strong barrier.
Support Levels:
1.2720: 20-day EMA.
1.2500: Upward-sloping trendline traced from October 2023 lows.
Indicators:
RSI: Oscillates between 40.00-60.00, signaling a sideways trend.
Outlook for Pound Sterling
Upside Drivers:
Improving UK GDP and manufacturing data later this week could strengthen GBP. BoE’s expected rate hold offers stability amid global monetary policy shifts.
Downside Risks:
A surprise in US inflation data could pressure GBP/USD. Persistent UK inflationary pressures might alter BoE's dovish stance.
In summary, GBP/USD remains in a holding pattern, awaiting catalysts from US inflation data and UK economic releases. The pair's ability to break above 1.2800 or drop below 1.2720 will provide clearer direction in the near term.
Upcoming Key Data Points
US Unit Labor Costs: Expected growth of 1.9% in Q3.
UK GDP and Factory Data: Investors await October data later this week, with expectations of a recovery after September declines.
Technical Outlook: GBP/USD
Resistance Levels:
1.2800: Key psychological level.
1.2830: 200-day EMA acting as a strong barrier.
Support Levels:
1.2720: 20-day EMA.
1.2500: Upward-sloping trendline traced from October 2023 lows.
Indicators:
RSI: Oscillates between 40.00-60.00, signaling a sideways trend.
Outlook for Pound Sterling
Upside Drivers:
Improving UK GDP and manufacturing data later this week could strengthen GBP. BoE’s expected rate hold offers stability amid global monetary policy shifts.
Downside Risks:
A surprise in US inflation data could pressure GBP/USD. Persistent UK inflationary pressures might alter BoE's dovish stance.
In summary, GBP/USD remains in a holding pattern, awaiting catalysts from US inflation data and UK economic releases. The pair's ability to break above 1.2800 or drop below 1.2720 will provide clearer direction in the near term.