Intraday selling of GBPUSD

19 July 2023 160
Intraday selling of GBPUSD

The GBPUSD currency pair broke through the resistance level at 1.2850 and headed up to 1.3140 last week. At the same time, it did not retest the previously broken level.


But today seems to be the day when the fundamental basis for a return to 1.2850 appeared.

Unexpectedly, the UK Consumer Price Index declined even greater than predicted.


To recall, May’s index was 8.7% against the forecast estimates of 8.4%. At the same time, the real inflation rate outpaced the predicted ones for 4 months in a row, leading to a significant surge in market participants' expectations to curb inflationary pressure.

Today there was a sharp reversal in inflation estimates: instead of the projected index value of 8.2%, the actual result amounted to 7.9%.


It is most likely to be just a temporary fluctuation, as inflationary processes in the economy slow down over a lengthy period of time, and it will not happen in a day, a month or even a year.

However, the short-term momentum of the GBPUSD pair’s downward movement will definitely take place, and the technical need to retest the previously broken level confirms it.

 

Final recommendations:

Sell GBPUSD with the target of 1.2850.

Set a Stop-loss at 1.3100.


This content is for informational purposes only and is not intended to be investing advice.

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