- GBP/USD uptick from the UK GDP fails to sustain.
- USD pullback from the day high also was unable to push the pair higher.
- The US CPI figures receive a muted response from the pair.
The GBP/USD posted fresh weekly lows during the mid-European session, and now bears are waiting for the pair to move below the psychologically important 1.3000 level.
The earlier intraday bounce was quickly met with renewed selling around the 1.3065 regions and the pair traded in the red soon after. The rebound was due to the dollar weakness and a better-than-expected UK GDP report.
The dollar couldn’t maintain its earlier gain as the uncertainty over the fiscal stimulus deal pushed the hopes of a US economic recovery to the background. The uptick in the Treasury yields also failed to enthuse either the dollar or the sterling bulls.
The selling seen in recent hours lacks any fundamental catalysts and is entirely technical. Further bearish follow-through in the pair can bring in more momentum as swing traders will position for further extension of the current fall from the multi-month tops.
The US CPI rose 0.6 Percent month-on-month in July against an expected 3 Percent; yearly estimates were also surpassed and came in at one Percent. Core Consumer Price Index, which excludes energy and food costs, was higher by 0.6 Percent and 1.6 Percent, monthly and yearly basis, respectively.
GBP/USD shrugged off the data and thus asked for some caution from bearish traders. A follow-through selling, below 1.3000 dollars, at this level will be prudent to wait for before initiating any bearish position.