Spiking UK Inflation Pulls Down British Pound
Strengthened greenback pulled GBP/USD back to test the key 1.300 level.
The US Dollar Index has broken above the resistance level of 100.30 and is now heading for 100.50. Further consolidation through the next resistance of 100.85 would be bearish for the GBP/USD pair.
Today, eyes will turn to the inflation reports from the UK. The inflation rate grew by 1.1% month-over-month in March, exceeding analysts’ expectations. On a year-over-year basis, the rate increased by 7%, contrary to a consensus of 6.7%.
Meanwhile, Treasury yields have begun to rise again after yesterday’s setback and further rallies will strengthen the greenback.
Though the current support level where the GBP/USD currency pair is at has been tested many times before and proved its strength, failure will mean a downside momentum towards the next support at 1.2970. Whereas a move above will push the pair towards the next resistance at 1.3030.