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GBP/USD leaped above 1.30 on weaker-than-expeced US CPI data

The GBP/USD pair rose to fresh two-week highs above the 1.30 mark after the greenback came under a heavy pressure amid disappointing inflation and retail sales data from the United States. At the moment, the pair is trading at 1.3005, up 0.5% on the day.

 

According to the data released by the U.S. Bureau of Labor Statistics on Friday, the Consumer Price Index in the U.S. eased to 1.6% on a yearly basis in June from 1.9% in May as it remained unchanged on a monthly basis. Further details of the report revealed that the 1.6% decline seen in the energy index offset the increase in the index for all items less food and energy (1.7% YoY). Moreover, advance estimates of U.S. retail and food services sales for June contracted by 0.2%, missing the market consensus of 0.1% growth.

 

  • US: Consumer Price Index was unchanged in June on a seasonally adjusted basis
  • US: Retail and food services sales for June 2017 were $473.5 billion, a decrease of 0.2%

Today's data suggested that the Fed is likely to keep its dovish stance and pushed investors away from the greenback, dragging the US Dollar Index to its lowest level since late September of 2016 at 95.01. The index is now at 95.06, losing 0.53% on the day.

 

 Industrial Production and Capacity Utilization are coming up next from the U.S. but they are unlikely to change the mood surrounding the US dollar. Additionally, Dallas Fed President Robert Kaplan will be giving his remarks.

 

  • Fed’s Kaplan: Recent weak inflation numbers are transitory

Technical outlook

 

If the greenback sell-off continues as we approach the end of the week, the pair could aim for 1.3030 (Jun. 30 high). A weekly close above the 1.30 handle could open the door for further gains towards 1.3100 (psychological level) and 1.3185 (Aug. 18, 2016, high). On the downside, supports could be seen at 1.2930 (Fib. 23.6% retracement of 21 - 30 June upsurge), 1.2890 (20-DMA) and 1.2775 (100-DMA). 

Check the website for more information: https://freshforex.com/analitics/news/all/finnews_1420293.html

 

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