The GBP/USD currency pair has shed its biggest weekly loss in more than a week. The pared area in the Asian session was close to the 1.2200 mark. Hence, the pair cheers the increased UK reports while mixed reactions sweep the market.
A Weakened USD and Strong UK Data
The US Dollar’s pullback also instigated mixed feelings in the market. But then, the market’s concerns before the week’s major events might challenge the pullback. It could help call it back from its weekly low point.
There were strong reports from the UK’s BRC Retail Price Index for May. The index rose to 3.1% year-on-year against the last figure of 2.8% in April.
GBP/USD price chart. Source TradingView
Remember the hopes of GBP/USD buyers when they anticipated hawkish statements from the BOE Governor. The BOE Governor had made an appearance at the European Central Bank’s Forum.
The retail price made the highest increase since 2008 according to the BRC. The US Dollar index fell by 0.10% to hit 104.39 at least. The yields prolonged the pullback from the previous day’s one-week high.
Unclear Stock Events
The Asia-Pacific equities and the US stock futures are all traded in a mix. The US Dollar index benefitted from an increase in short-term retail inflation speculations. It also benefited from more hawkish comments from the Federal Reserve’s top officials.
The index from the American Conference Board Consumer Confidence equally fell. It fell to its lowest since February 2021 from 103.20 to 98.7. More details point to the increase in the expected consumer inflation rate to 8%.
The GBP/USD pair might see more recovery as the ECB Forum draws closer. This is taking the market’s drawbacks and strong UK reports into consideration.
But Andrew Bailey has not pleased hawks recently and sellers can be later recalled. It, however, depends on if Powell is able to gain the confidence of bulls.
The US Core PCE for Q1 is expected to remain the same at 5.1%. it will be equally important to observe.
In addition, the last reading of the Q1 GDP might forecast the pair’s intraday moves. It is equally likely to confirm the 1.5% annual contraction.
A horizontal area of six weeks surrounding the 1.2155-60 mark resists short-term GBP/USD decrease. It happens more so amid the consistent relative strength index and slow MACD.
Nevertheless, the rebound moves have to be validated from the 10-period daily moving average. It is important before aiming for the former support line of 1.2305.