GBP / USD – Prices, Charts and Analysis
- Overall inflation in the UK is 9.1% y / y.
- GBP / USD drift lower on the US dollar strength.
Price pressure in the UK remains inflated and has been at highs for decades. The latest Inflation Report from the Office for National Statistics (ONS) shows annual total inflation of 9.1% in line with market expectations, while monthly inflation rose by 0.7%. The annual figure is the highest figure since the series started in 1997.
Core inflation fell in May to 5.9% y / y from 6.2% in the previous month. The CPI index including owner-occupied housing costs (CPIH) increased by 7.9% in the 12 months to May 2022, up from 7.8% in April.
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Today’s data will keep the pressure on the Bank of England to raise interest rates aggressively. The Bank of England (BoE) recently warned that inflation could reach 11% this year before falling. The British central bank will have to balance how to keep the economy growing, while at the same time pushing inflation down.
GBP / USD remained slightly changed to marginally lower, mainly due to the US dollar strength. Later today, we have the first testimony of Fed Chairman Jerome Powell, and this is likely to be the main driving force behind today’s price action. GBP / USD still remains within last Thursday’s bullish candle – 1.2040 / 1.2405 – while a resistance zone around 1.2340 will provide initial resistance.
GBP / USD Daily Price Chart – June 22, 2022
Retailer data shows 71.25% of traders are net long with the ratio of traders long to short of 2.48 to 1. The number of traders net-short is 2.28% lower than yesterday and 14.38% lower from last week, while the number of traders net-short is 10.21% higher than yesterday and 48.41% higher from last week .
We typically have a conflicting attitude towards public sentiment, and the fact that traders are net long suggests that GBP / USD prices may continue to fall. Still, traders are less net long than yesterday and compared to last week. Recent changes in the mood warn that the current The GBP / USD price trend may soon turn higher despite traders remaining net-long.
What is your view on that British pounds – bullish or bearish ?? You can let us know via the form at the end of this paragraph, or you can contact the author via Twitter @ nickcawley1.