The GBP/USD price is in a consolidation mode ahead of key economic data from the UK. The GBP to USD exchange rate is trading at 1.2217, which is a few points above last Friday’s low of 1.2176. This price is about 1.50% below the highest point last Friday when the Fed and BOE decided to hike interest rates.
This will be an important week for the GBPUSD price since the Office of National Statistics (ONS) is scheduled to make its interest rate decision on Wednesday. Economists expect the data to show that inflation continued rising in May as energy prices skyrocketed. Precisely, analysts expect that the headline CPI rose from 9.0% to 9.1% in May. If they are accurate, it will be a bigger number than in the United States, where inflation stands at 8.6%.
Excluding the volatile food and energy prices, analysts believe that consumer inflation dropped from 6.2% to 6.0%. If this is accurate, it will be a positive sign that the country’s inflation is stabilizing. The ONS will also publish the latest producer inflation data at a time when the BOE’s credibility is plunging.
The other data that will move the GBP/USD will be the flash manufacturing and services PMI data and the UK retail sales numbers. With inflation running red hot, it will not be a surprise to see retail sales plummeting. Analysts expect that the headline retail sales figure declined by 4.8% in May while core sales fell by 5.2%.
The GBP to USD price is trading at 1.2228, which is slightly above last Friday’s low of 1.2173. The pair has moved slightly below the 25-period and 50-period moving averages. It seems like it is forming a bearish flag pattern on the hourly chart. In price action analysis, this is usually a bearish signal.
The price is slightly above the first resistance of the Andrews Pitchfork indicator. Therefore, there is a likelihood that the GBP/USD will have a bearish breakout as bears target the middle line of the pitchfork indicator at 1.2020. A move above the resistance at 1.2250 will invalidate the bearish view.
This post was last modified on %s = human-readable time difference 05:28